In a recent interview with The Fully Charged Podcast, Ford Motor Co CEO (NYSE:F) Jim Farley reflected on the history of Henry Ford and shared insights that could be valuable for Elon Musk-led Tesla Inc (NASDAQ:TSLA).
“I think this really one of Tesla’s most challenging moments,” Jim Farley said in an interview with The Fully Charged Podcast published on the YouTube channel Everything Electric Show on Monday.
Tesla is now relying on heavy discounts to stimulate demand. But it is a “sugar high,” Farley said while adding that it would instead reduce elasticity. “Less and less people are signing up as you cut the price.”
Farley drew parallels to Henry Ford’s experience with the Model T, emphasizing the danger of commoditizing a product solely based on price.
He recounted how Ford significantly reduced the Model T’s price to encourage farmers to choose cars over horses, but this nearly drove the company into bankruptcy.
Tesla commenced price cuts in the U.S. in January with price cuts of up to 19.7%. The slew of price cuts enabled better first-quarter deliveries for the EV giant and added pressure on rival EV makers to cut costs to battle competition.
Though there have been intermittent price hikes, Tesla vehicles are still priced considerably lower than at the beginning of the year.
Tesla and Ford struck a deal where Ford owners, including those who own the Mustang Mach-E, F-150 Lightning, and the E-Transit, can use the Tesla charging station in the next year.
Ford owners are to purchase an adapter that will connect with the Tesla charger as it is estimated to be $100.
Farley has stated it will offer its Ford customers different payment options, such as subscriptions.
“This is great news for our customers who will have unprecedented access to the largest network of fast-chargers in the U.S. and Canada with 12,000+ Tesla Superchargers plus 10,000+ fast-chargers already in the BlueOval Charge Network,” said Farley about the new partnership. “Widespread access to fast-charging is absolutely vital to our growth as an EV brand, and this breakthrough agreement comes as we are ramping up production of our popular Mustang Mach-E and F-150 Lightning, and preparing to launch a series of next-generation EVs starting in 2025.”
Produced in association with Benzinga
Edited by Alberto Arellano and Kyana Jeanin Rubinfeld