Ford CEO Jim Farley recently thanked Tesla and Elon Musk for leading the way when it comes to electrification. This a far different from many of Farley's, as well as his team's, words and retweets related to Tesla in the past. More recently, Farley had a meeting with Ford employees during which he talked at length about the competition – Tesla, of course – and the realities ahead.
Sound familiar? Volkswagen Group CEO Herbert Diess just did the same thing, and there's a chance he might lose his job over it.
When it comes to the future of the auto industry, and especially related to the potential future Big Three automakers: Ford, Tesla, and Volkswagen, there's a whole lot to unpack here. However, we're trying to do our best to summarize the situation and keep it relatively concise.
The short of it is, the Detroit Free Press says it got its hands on a video of Farley's recent employee meeting. The CEO reportedly talked about the EV market, showed charts and graphs, and compared Ford to Tesla. He also pointed out what Tesla is doing to be so successful. The publication says Farley also referenced VW and Rivian.
Farley told some 20,000 global Ford employees it's time to take Tesla seriously, he made no jokes, and he didn't talk trash about any other companies. He said:
"If Ford was a trillion-dollar company, our stock would be worth about $250 a share. Think about the value creation of Tesla right now. And they have resources, smart people, the Model 3 is now the bestselling vehicle in Europe. Not electric. Flat out. It was the bestselling vehicle in the UK. Most months, it’s the bestselling vehicle in California. Not just electric, but overall. If we’re going to succeed, we can’t ignore this competition anymore.
"Look at Tesla, why are they doing what they're doing and what can we learn from them. First, they have a direct model ... There’s no one in between. They make it so easy. Three or four clicks configuring the vehicle with not a lot of complexity to delivering it to the customer. Simple, non-negotiated pricing. A large reservation system as well as remote service.
"Second, Tesla maximizes use of electrons in the vehicle. No one does it better than they do. Their customers pay less for a better battery..."
"Third, the product itself is highly differentiated from the rest of the ICE field and complexity is tiny, compared to OEMs."
Farley worked to convince his employees to change their thinking going forward. He said, while Ford is making progress, it has a ton of work ahead. He noted that Rivian is already delivering its electric pickup truck, as well as a van for Amazon. Tesla just sold 100,000 Model 3 sedans to Hertz. He added that Volkswagen is the second-largest producer of EVs behind Tesla. This is all a really big deal.
Ford employee Ryan McManus, who attended the meeting and got permission from Ford to talk about it with the media, shared:
"It was almost like taking apart a close win after a football game. You feel good about the win. You come into the locker room, the coach says 'great win' and here are the places you didn't come through, you need to work on, and this is where we'll practice this week."
"The tone of the meeting wasn’t negative, it was very positive.
"We need to try and get down to less complexity and fewer screens. Simplicity is hard. Challengers, especially startups like Tesla, have the advantage of a clean sheet ..."
Some Future Perspectives to Consider
At InsideEVs, we've mulled over this Farley talk, his recent tweets, and the situation with Herbert Diess for some time now. It will be very interesting to see how it all plays out.
Ford and Volkswagen are arguably wise to tout Tesla. Getting Tesla in the news related to your auto company can increase media coverage. If Ford and VW can "do it like Tesla," fans of the popular US electric automaker may begin to support them. And, who better to appease and appeal to than Tesla fans, who may have long wait times for Tesla deliveries, and may consider another brand, as long as it's not a brand that "hates" their beloved Tesla and Elon.
Will Diess be ousted? Will Ford and VW employees lose their jobs?
If folks decide to – or are forced to – leave Ford or Volkswagen, they may have an opportunity to take a job at Tesla, or perhaps one of many growing startups, such as Rivian or Lucid. Or, depending on which OEM has the most success in the shortest time, VW employees could flock to Ford, or vice versa. While jobs may need to be eliminated, EVs aren't going away, and where there's a job lost, there's probably a need for a job filled elsewhere.
If Diess is let go, perhaps he can move on to work side-by-side with Farley at Ford. Even more interesting, might Elon Musk hire Diess to head up Tesla's European arm?
Diess clearly has a thing for Tesla, and he'd probably be elated to join the team, especially if the Germans push him out. It wouldn't be unlike former Ford CEO Mark Fields' move, who's now interim CEO at Hertz. He just helped make the Tesla / Hertz "deal" happen, which is likely helping to light a fire under Farley and Ford.
If Diess stays at the helm of VW Group, perhaps Ford and Volkswagen will strengthen their cooperation to tackle Tesla as a team. Both CEOs seem to see eye to eye, and with their combined efforts, the results could be huge.
Will either Ford or Volkswagen ever consider teaming up with Tesla? We can't rule it out, but it continues to seem highly unlikely, though Tesla could buy both companies if it chose to.
At this point, it's all just a waiting game, but we're very excited to see that Ford and Volkswagen, or more specifically, Farley and Diess, have woken up to reality, and they're yelling from the mountaintops. Will anyone listen?
The Detroit Free Press article (linked below) goes into much more detail about the meeting, complete with a multitude of quotes. However, we feel we've provided an adequate summary of the overall gist. Now, we'd like to know what you think. This topic deserves candid conversation like none other. Head down to the comment section and have at it!