Ford CEO warns Tesla about ‘product freshness,’ believes their EVs have gotten commodities


Ford CEO Jim Farley is warning Tesla about “product freshness” as he believes Tesla’s electrical vehicles are prone to changing into commodities.

Final summer time, Farley precisely predicted {that a} worth struggle within the EV market can be coming quickly. Tesla began it in early January, and Ford adopted with worth cuts to its Mustang Mach-E electrical SUV; nevertheless it didn’t finish there, as Tesla saved slashing its costs throughout its complete EV lineup all 12 months.

Farley commented on the scenario once more (by way of Insider) and in contrast what Tesla is doing with what occurred with Ford when it turned a mass-producer of vehicles itself:

“Go learn ’1913,’” Farley stated, referring to a guide that includes a shut take a look at the 12 months Ford turned a mass-producer of automobiles. “This has all occurred earlier than.”

The CEO believes that reducing prices and costs is simply a part of the equation to create demand as he warns Tesla CEO Elon Musk that in the event that they focus solely on that, they are going to have an issue with “product freshness”:

I feel what he’s going to study is product freshness means quite a bit. The product will get commoditized and then you definitely lose your pricing premium. That’s a extremely harmful factor.

On Tesla’s most up-to-date earnings name, Musk stated that Tesla’s purpose is to regulate costs to make sure demand matches the automaker’s elevated manufacturing capability.

Electrek’s Take

Tesla has at all times stated that making its merchandise one of the best they are often is a high precedence, so it’s not like Tesla just isn’t attempting to maintain its merchandise recent.

Nevertheless, Farley has a degree. A few of Tesla’s merchandise have change into a bit stale. The lineup as an entire actually is, with solely 4 fashions and no new fashions since 2019, although the Cybertruck goes to partially repair that.

Mannequin 3 is actually the one in want of a refresh, and apparently, one is coming subsequent quarter, however we don’t know but how vital will probably be. An enormous change up to now seems to be a brand new front-end.

However Mannequin Y is Tesla’s most essential product, and sure, there’s an argument to be made that it’s changing into a commodity on the present quantity Tesla is producing it. It has change into all about pricing.

I feel one of many issues with Tesla proper now’s that the automaker is extraordinarily centered on its Full Self-Driving product, which it’s satisfied it could actually obtain whereas rising the worth of all of the automobiles in its fleet.

Within the meantime, and for the people who find themselves not satisfied this can be a certainty, it appears to be like like Tesla is slipping on different features of the enterprise.

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