Ford targets Tesla with startup culture shift

“Right now we need to respect that there is one profitable EV company in the world that produces vehicles at scale. Just one”

Ford is preparing to claim a significant chunk of the global EV market by transforming its core company culture from a traditional auto maker model to something that more closely aligns with a startup or tech business.

With three pure-electric vehicles already on sale around the world and more to come, the company is demonstrating it is serious about zero-emissions models, but says the product is only a part of the formula necessary to compete with new specialist EV brands and longstanding rivals alike.

7

As part of a recent broad-ranging restructure, Ford created three new divisions consisting of the Pro commercial branch, Blue internal combustion engine (ICE) component, and Model E for its growing electric family.

It’s the latter division that Ford says has quietly been adopting a startup culture to become more competitive in a realm created and shaped by relatively young vehicle manufacturers.

Speaking at the company’s Experience Centre in Dearborn, Ford Motor Company CFO John Lawler acknowledged the work of electric giant Tesla but said Ford’s plans to become a more dominant presence in the market will start to emerge in 2023.

7

“Right now we need to respect that there is one profitable EV company in the world that produces vehicles at scale. Just one,” he said.

“They [Tesla] have incredible margins, but the thing that we have is an EV startup company buried inside Ford. No one really knows what that is, and no one can see it but they will be able to next year when start reporting our segments by EVs, Blue (ICE), and Pro which is commercial.”

With more than 340,000 vehicles sold in just the third quarter of 2022, Tesla is the world’s clear leader in electric vehicles but Lawler said the strategy has been laid out to encroach on the Californian startup with “600,000 units by the end of 2023, two million units by 2026.

“We have to get to those milestones before we start talking about overtaking somebody like Tesla, but those are our goals.”

7

Tesla is not the only rival Ford is keeping an eye on as it builds its electric momentum and is rolling out a multi-pronged assault on the market to cover as many bases as possible.

While its performance-focused Mustang Mach-E is an obvious shot across Tesla’s bow, its F-150 Lightning will go after rivals in the ute space including Rivian, while Ford's E-Transit is already dominating over commercial competitors such as the Mercedes e-vans.

7

While Ford wants to behave more like a fresh startup, Lawler explained that its E division has something the tech company rivals don’t and how its experience and extensive resources will enable the company to have “the capabilities of a traditional auto maker with the nimbleness and inventiveness of a startup.

“I think there are a lot of true startup companies in this space that would love to have the excellence we have in manufacturing and scaling, but in the shifts we’re making to more of a startup type culture, it’s allowing us to behave differently.

“We’re simplifying our processes, we’re sharpening how we allocate our capital and we’re really focused on those digital connected services and experiences we’re creating for our customers.”

7

Ford is not the first car maker to review its operations in the light of Tesla’s achievements, with many of the mainstream brands responding in varying degrees to try and emulate its success.

When asked if the Blue Oval would have three electric models in market in 2022 if it were not for Tesla’s aggressive strategy, Ford EV programs and Model E vice president Darren Palmer responded “probably not.”

“Tesla did kick-start the market,” he said. “They showed what they [EVs] can be, and how compelling they can be.”

Palmer explained that frequent review meetings with chief EV and digital systems officer Doug Field are part of Ford’s bid to recreate the same desirability in its electric models, and that mediocre is not accepted as part of the new Model E culture.

7

“We meet every week under Doug and he says: 'Did you do the best work of your entire career last week? If you didn’t, what should we change to get to that?'

“We present a car and ask if that’s something that’s going to change the whole market.

“We’ve put a Silicon Valley team together with a Ford team to make a dream team, with a $50bn budget and the support of the entire Ford system. And we just invested in the biggest industrial automotive plant in history to build the next-generation F-150.

“If we don’t get it right with that, good luck”.