"We know THATOs and Tesla are our competitors and we have to beat them, not just match them." That's what Ford CEO Jim Farley said at a live conference yesterday.
When he said this, Ford's main electric vehicle model Mach-E in 2021 sold 27,000 units, with a market value of $67.852 billion, while Tesla's global sales in 2021 were 936,000 units, with a market value of $789.641 billion, and Weilai's sales in 2021 were 91,000 units, with a market value of $32.543 billion.
It may not be difficult to beat Weilai, but the bold idea of beating Tesla is still a bit too bold for the CEO who has been in office for more than a year.
As a pioneer in the automotive industry, this situation is somewhat embarrassing. But under the wave of the new four modernizations, this is what almost all traditional auto giants have to face at present.
And Farley dared to make such a towering flag at this time, which was a bluff? Or is Ford really ready to change his life?
01 Fierce will lead, Ford 2021 forge ahead
Under the leadership of such a reform-minded general as Farley, although the current Ford is not an electrification giant, with such an eye-catching product as The Mach-E, it has gained a lot of sought after attention and sales in the Chinese and American markets in the past two years.
According to a research report by Morgan Stanley in early March last year, Tesla's share of the U.S. pure electric vehicle market in early 2021 has slipped from 81% in 2020 to 69%, of which the lost share has almost been taken away by Ford Mach-E.
In the past 2021, due to the impact of GM electric vehicle sales on the Chevrolet Bolt recall, Ford Motor's electric vehicle sales in the United States jumped to the second place, second only to Tesla.
Throughout 2021, Ford's electric vehicle sales grew 36% faster than the entire market segment, and in December, it achieved a huge increase of 121% year-on-year, with sales reaching 12,284 units.
In addition to showing a gratifying rally in the terminal market, in the capital market, Ford has shined in the past year.
According to the data, Ford's stock price soared by about 140% in 2021, from a low of $8 per share at the beginning of the year to a new all-time peak of $20 per share at the end of the year, surpassing Tesla, General Motors and many electric vehicle start-ups to become the best-performing stock among American automakers in 2021.
These positive performances are inseparable from the new strategies of Farley, the new CEO.
Since becoming CEO in October 2020, Farley has been accelerating Ford's electrification transition, promising to increase electric vehicle production to 600,000 units within two years and eventually surpass Tesla in U.S. electric vehicle sales.
At Ford Motor's Capital Markets Day event last May, Farley presented his Ford+ development plan, which has been laid out with an unprecedented density on the road to electrification.
Not only has Ford poached new executives from tech companies like Apple to overhaul the management team, but it has also increased its current investment in electrification from $22 billion to more than $30 billion (about 200 billion yuan) between now and 2025. In addition, Ford also said it will develop two exclusive platforms for pure electric by 2025, one for full-size trucks and SUVs, and the other for cars and small SUVs.
Prior to that, last April, Ford also assembled a team of 150 experts to establish Ford Ion Park, a global battery innovation center.
In terms of products, last May, Ford released the pure electric pickup truck F-150 Lightning, and it is reported that it has received more than 200,000 orders. In addition, Farley also said earlier this month that three housekeeping products, such as Mustang Mach-E, F-150 Lightning and E-Transit, have accumulated orders and reservations for more than 275,000 units. ”
02 The way forward still needs to be cut through thorns, and the split of the electric vehicle business is blocked
Admittedly, Ford's electrification of roads has indeed made unprecedented strides, but at the same time, it is plagued by limited capacity, tight supply chains, and frequent quality problems with electric vehicles.
In the past year, Mach-E has repeatedly delayed delivery and even recalled due to detail quality problems such as insufficient glass adhesion and excessive size of the bolt holes of the seat belt buckle.
In addition, the oem has also suffered a wide range of chip shortages, and many factories in Michigan, Chicago, Kansas City, Louisville and other factories have been forced to shut down or reduce production, and the shortage situation continues, and it is expected that it will not usher in a significant improvement until the second half of this year.
Tight supply chains not only delayed delivery of the Mach-E by several weeks, but also failed to deliver the desired number of newly launched electric pickups.
The above is only a real problem on the production side, and what makes people feel even more disappointed about Ford's prospects for electrification is the failed split plan.
At yesterday's live-streamed meeting, Farley responded positively that there were no plans to break up the electric vehicle or gasoline vehicle business. For Ford, which is in full swing, electrification can be regarded as a thunderbolt on a sunny day.
As early as January, Bloomberg reported that Ford's planned divestiture of the electric vehicle business would be part of the company's massive restructuring plan, resulting in a high valuation like that of electric vehicle startups. Now, however, Farley's denial has left the split in Rashomon.
Industry insiders generally believe that the independent splitting of the electric vehicle business is not only conducive to the re-evaluation of the company's business in the secondary market, but also significantly enhances the autonomy of the new business sector and the flexibility of reform and innovation, thereby creating greater potential value and conforming to the transformation of the global automotive industry and changes in the market competition pattern.
Therefore, for Ford motor to split the electric vehicle business, Wall Street investors are basically in favor of it, and ask it to increase value by cutting legacy costs and gain more capital market access.
Considering all factors, the split of the electric vehicle business for Ford can be said to be a key decision for long-term development, and according to people familiar with the matter, Farley has also been seeking to maximize the value of Ford's electric vehicle business, and the current denial shows that the emerging leader has obviously encountered some pressure from within.
Analysts say the key to influencing the direction of the breakup plan is Ford's rulers, the Ford family, who fear the split will hurt their wallets. At the same time, the split of the electric vehicle business also involves the interests of shareholders, trade unions, dealers, and how to dispose of assets such as research and development and factories. This is a very real problem facing the entire Ford motor vehicle.
If the split plan really stops here, it will mean that Ford will lose many possibilities in the capital markets, and it will face a lot of financial pressure in the tens of billions of investments by 2025. In this context, Ford may need to use other investment and financing channels to accumulate strength for reform.
03 2022 continues to increase the number, but catching up with Tesla is not an expansion on the line
However, in the context of the high probability of the split plan falling through, the brave Farley did not reveal the slightest timidity for the future, and once again emphasized the determination to impact Tesla.
Earlier this month, foreign media reported that Ford motor vehicles are planning a major restructuring to prepare for the future of electrification, while also potentially increasing the cost of electrification by another $20 billion, that is, investing $50 billion in electrification by 2025.
Late last year, Farley also said it would increase its annual electric vehicle production capacity to 600,000 units by 2023. He believes that if Ford's production capacity can meet existing demand, the electric F-150 Lightning can fully compete with the Model Y in the US electric vehicle market.
But is the difference between Ford's electric car and Tesla just a difference in production capacity?
In contrast, the Model Y has a significantly wider audience than the F-150, which is not the first choice for most families to travel on a daily basis, and considering the oil prices and policies in the United States, the advantages of electric pickup trucks are not obvious.
Two months ago, Morgan Stanley predicted that Ford's electric vehicle sales would reach 150,000 units in fiscal year 2022 (3.5 percent of Ford's sales), 473,000 units (11.5 percent) in fiscal year 2025, and 1.235 million units (33.7 percent) in fiscal year 2030. This forecast is still far from Ford's previous target of 40% of total sales of pure electric vehicles in 2030.
At the same time, Tesla's annual sales have reached a height of 936,000 vehicles, and the Current Berlin factory is under construction, the Texas factory is about to start production, and the Shanghai factory is also implementing expansion plans, and the production capacity will be further increased or even doubled. Musk also said that despite supply chain problems, Tesla's sales will easily increase by more than 50% by 2022 compared with 2021.
In this regard, Michelle Krebs, an analyst at Cox Automotive Consulting, also believes that Ford's pure electric models are not enough to pose a sufficient threat to Tesla in the short term. It can be seen that to impact Tesla in terms of sales, Ford has a long way to go.
In addition, Farley also said in yesterday's live broadcast that the company's management team believes that their electric vehicle and internal combustion engine vehicle businesses are underperforming in terms of profitability. In this regard, He believes that Ford can greatly reduce the operating costs of the traditional internal combustion engine vehicle business by means of better quality, lower structural costs and reduced vehicle complexity.
In fact, not only fuel vehicles, as far as Ford itself is concerned, such an idea also plays a very key role in the scale of electric vehicles, but if you want to compare with Tesla, no one in the entire electric vehicle industry can win Tesla in terms of cost reduction.
04 It is not Tesla that beats traditional car companies, it is users
In the end, expanding production or reducing costs for Ford electrification is only a symptom, not a cure, in order to truly realize the impact on Weilai Tesla, what Ford needs to do is to create its own brand aura.
Tesla this brand in addition to Musk this "technology genius" live signboard, its most concerned label is the automatic driving technology, combined with SPACE X, brain computer, StarChain and other related enterprise technology, for Tesla to create a very distinct technology enterprise label; benchmark BBA, positioning high-end Weilai is known for brilliant user service and high-viscosity user community, on the basis of its own product quality solid, unique service so that Weilai has a user recommendation rate and sense of identity beyond friends.
In contrast, Ford, which currently has three products of electric Transit, pickup truck F-150 Lightning and electric Mustang, on the one hand, the product positioning is hugely different, and a complete product matrix has not yet been formed, on the other hand, Ford electric products still lack distinct brand recognition and tone.
The labels of "Pioneer of the Automobile Industry" and "Centennial Ford" are no longer easy to make under the fierce wave of the new four modernizations, so in order to quickly surpass Tesla and Weilai in terms of sales volume and capital value, Ford needs to pay more attention to the creation of brand labels on the next electrification road, including but not limited to three electric technologies, intelligent cockpits, automatic driving systems, user services and other fields.
There must be a distinct and brilliant label, highlights, and always implement it, so that it is possible for more and more users to remember. Imperfection does not matter, mediocrity is the easiest to be eliminated.
On the road of electrification transformation, it is not just the Ford family that expects to impact Tesla but does not know how to break through the bottleneck.
Compared with many friends, Ford has obtained some good weapons and opened up some of its own territory, but it has just stepped out of the "novice village", and it is facing the situation of blocked injection of business splitting, limited production capacity, and unclear core competitiveness of the brand, not to mention many novice friends who still rely on oil to electricity products to cope with carbon emission indicators.
Behind it are countless unexpected alpine canyon rivers from research and development, production, users and other links. When it is really enough to launch an attack on Tesla, the big boss, then it will inevitably have to closely grasp the cutting-edge trends in the fields of electric, intelligent, and networking, and it also has a different cognition and concept of the new energy automobile industry than the traditional era.
In the context of this era when the new four modernization technologies are about to dominate the travel market, traditional car companies must become bold and flexible, and new concepts such as Internet thinking and user experience are the core driving forces of the current market.