March 27, 2023
Ford (F) CEO Jim Farley sent a clear message to Tesla (TSLA) investors: "Your profit margins will not stay so lofty in perpetuity".
"Tesla hasn't had any competition until Ford and others came along," Farley told Yahoo Finance Live on Friday (video above). "Now their prices are down like $7,000 in one year, so there's going to be more price competition in that market, and we're counting on that."
End quote.
More of the same Feisty rhetoric, can't blame him for trying, he doesn't have any other choice but to be positive and hopeful and even challenge the leader, it is all about pumping Investor confidence in the future.
However, let's try to unpack.
Ford, sold 96k Bev's at a Negative 40% operating margin is welcoming Tesla's $11k price drops? 20%, while Tesla sold 1.3m cars annually at a 17% operating margin, going to 2-2.3m cars this year, I bet, at slightly less margin?
Ford is the one challenging Tesla?
I don't think so, Neither is GM with 39k BEV sold worldwide.
The only thing currently challenging Tesla is its own production limits and Macroeconomy, possibly Chinese BEV car makers, but only in China and very.
The first is solved by growing 50% on average per year and building new Giga factories constantly.
The latter is solved by reducing costs through Innovation and vertical integration and reducing prices, expanding reach to a larger market share.
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