Ford says it ‘learned a lot’ from Tesla

One of the world’s most respected automotive brands has made some interesting observations about Elon Musk’s revolutionary approach to manufacturing.

A senior Ford executive has admitted the brand has learnt from Tesla’s approach to selling electric vehicles.

Lisa Drake, Ford’s vice president for EV industrialisation, said the brand would follow Tesla’s lead by concentrating on a small number of big-selling models, rather than trying to build a comprehensive stable of EVs.

“Scale matters in the EV game … We’ve learned a lot from Tesla: that producing low complexity units and fully maximising an assembly facility and cranking those products out one after the other, one after the other, with really lean labour, that’s what you need to do to compete in this hyper competitive space,” she said.

Her comments were echoed by Ford chief financial officer, John Lawler.

“I mean, right now what we need to do is we need to respect that there is one profitable EV company in the world that produces vehicles at scale. Just one and they have incredible margins,” he said.

He said Ford was developing “an EV startup company buried with inside Ford”.

To that end the brand has hired two former senior Tesla executives. Doug Field, who was previously at Tesla, joined from Apple last year, while the company poached Tesla engineering director Alan Clarke earlier this year.

Tesla has tasted success by keeping things simple. Picture: Thomas Wielecki.

Tesla has concentrated on building large volumes of just two models, the Model Y SUV and Model 3 sedan and Ford plans to expand its EV line-up focusing on just four models: the F150 Lightning, the Mustang Mach-E, the Transit and a yet-to-be revealed mid-size SUV for the European market that will be developed in co-operation with Volkswagen.

The brand, which sold just 60,000 EVs last year, plans to ramp up dramatically to 600,000 EVs by the end of next year and 2 million by 2026. By 2030, it plans to sell as many EVs as petrol cars.

Drake said the target was achievable.

Ford says it underestimated the demand for vehicles such as the F150 Lightning. Picture: Supplied.

“Nobody has a crystal ball but one thing I will tell you is we’ve always under-called it on EVs,” she said.

“We’re now realising it’s better to have the installed capacity there than to not. If you’re gonna guess wrong you want to guess on the high side,” she said.

Drake said she didn’t see a “huge proliferation” of different models built off the same platform.

“You’ll see manufacturing facilities that are designed very differently than they are today,” she said.

She said Ford’s suppliers had bought into its ambitious growth plans, so shortages of components and raw materials were unlikely to affect the EV rollout as they had in the past two years.

The Mustang Mach-E has been a hit for the Blue Oval. Picture: Supplied.

“This isn’t something that’s on paper. It’s actively worked. We have battery capacity being sourced right now. And that will get us to 2 million units by 2026,” she said.

She said there were some signs the semiconductor shortage that has plagued the car industry was beginning to ease and could ease further if the economic downturn led to a drop in demand for consumer electronic goods, which compete with the car industry for semiconductor supplies.

“You know, I think we’re seeing a light at the end of the tunnel,” she said.

The company recently increased the price of its Mach-E and F150 Lightning due to increases in the price of raw materials but Drake said recent investments in raw material mining should see prices plateau.

To future-proof its plans, Ford was sourcing raw materials from around the globe, including Australia where BHP was supplying Nickel and Liontown was supplying Lithium.

Originally published as Ford says it ‘learned a lot’ from Tesla