Ford Motor CEO Jim Farley expressed his optimism about the future of electric vehicles (EVs) during the company's third-quarter conference call. Although the company reported weaker-than-expected results, Farley remains positive about Ford's second-generation EV lineup.
Ford's operating profit for the third quarter came in at $2.2 billion, below the Wall Street consensus of $2.6 billion. The UAW strike and quality issues resulted in additional costs for the company, amounting to hundreds of millions of dollars. Furthermore, Ford's EV business experienced losses of about $1.3 billion, higher than expected.
Optimism About Gen 2 EVs
Despite the challenging quarter, Farley expressed his excitement about Ford's second-generation EVs. He specifically praised the company's forthcoming all-new full-size pickup truck, highlighting its thrill and superiority over Tesla's Cybertruck.
Similarities with Tesla
Ford's EV strategy aligns with Tesla's approach by incorporating structural battery packs, unibody castings, and LFP batteries. These elements contribute to more efficient design, reducing weight while maintaining the strength of the EV. As weight can impact range and battery costs, Ford aims to address this challenge through innovative technologies.
In conclusion, while Ford faced disappointing financial results for the third quarter, CEO Jim Farley's positive outlook on the company's future EV lineup shows confidence and determination. By leveraging advancements in EV technology, such as structural battery packs and efficient design, Ford aims to strengthen its position in the electric vehicle market.
The High Cost of EV Batteries
Batteries are a significant expense when it comes to electric vehicles (EVs). To address this issue, Tesla introduced the use of LFP batteries (lithium-iron-phosphate) in some of its standard-range products a while back. The "F" in LFP stands for Fe, which is the elemental symbol for iron. The introduction of LFP batteries aimed to make EVs more affordable.
Streamlined Car Frame Construction
Another area where Ford is taking inspiration from Tesla is in the use of unibody castings. This concept is similar to what Tesla refers to as "giga castings." Essentially, instead of welding various parts together, a portion of the car's frame is cast as a single piece. This approach reduces the number of parts required and minimizes waste.
Ford's Advancements in Driver Assistance
Peter Stern, Ford's president of integrated services, shared an interesting statistic during a recent event. He mentioned that Ford vehicles have been driven hands-free for a total of 125 million miles. To put this into perspective, it's equivalent to making 500 round trips to the moon. Stern also highlighted the effectiveness of Ford's driver assistance software, known as BlueCruise. Real-world data from Mustang Mach-E vehicles using BlueCruise revealed over 10 times fewer lane departures compared to driving without assistance. The latest version of BlueCruise (1.3) is currently being rolled out.
Stock Performance Comparison: Ford vs. Tesla
Both Ford and Tesla have experienced a decline in stock value recently. Over the past month, Ford stock has dropped by approximately 12%, while Tesla stock has seen a 14% decrease. One of the contributing factors to Tesla's declining stock performance was its disappointing third-quarter results. During this time, Elon Musk sounded pessimistic about high interest rates and the global economy—a departure from his usual optimistic stance.
Limitations and Differences
Although there are some notable similarities between Ford and Tesla, there are also significant differences. Ford operates as a union shop, which means it may experience higher costs compared to Tesla, which is not unionized. Furthermore, Ford is still navigating its way in the EV market, which was pioneered by Tesla. While Ford can draw inspiration from Tesla, it ultimately has its own unique challenges and path to navigate.