Jim Farley sees China's Nio and Tesla as Ford Motor Company's main rivals, the CEO said earlier this week.
Speaking at the Wolfe Research Global Auto, Auto Tech, and Mobility Conference webcast on February 23, Farley offered an insight into the future of the 118-year-old automaker, refuting recent speculation about Ford splitting its operation into two separate companies— one for EVs and the other for traditional internal combustion engines.
That's not something new, as Ford has already denied a potential spinoff of its EV operations. What's more interesting is how Farley positions Ford in the market for the future. As per the Detroit Free Press, Farley said the following.
"We have no plans to spin off our electric business or our ICE business. It's really more around focus and capabilities, expertise and talent. Those are key for Ford, and this is what we're working on. We know our competition is Nio and Tesla, and we have to beat them, not match them."
Mind you, this was not the first time Farley mentioned Nio and Tesla as its key rivals in China and North America, respectively. Speaking to Yahoo Finance Live in January, Ford's CEO complimented both EV makers for how far they've come since launching as startups.
Gallery: Ford F-150 Lightning Pro
"Well, the companies that I think about that I admire because of their commitment—and frankly, the hard work they did to earn their reputation—are companies like Nio and Tesla. They've been at this a long time. They engineer their vehicles differently. I'm most respectful of Tesla's profitability. They're now making more than $10,000 a vehicle in their second quarter earnings."
While Jim Farley publicly acknowledges these companies' merits, he makes it clear that Ford wants to surpass them. During Ford's Q4 earnings call in early February, Farley noted that if the company were able to build as many F-150 Lightning pickups as Tesla is producing Model Y crossovers, the truck would "rival the Model Y as the leading BEV nameplate in the US market."
However, Ford needs to make drastic changes to be able to beat Tesla and Nio, Farley believes.
"We have too many people. We have too much investment. We have too much complexity and we don't have expertise in transitioning our assets. There's waste."
He also noted that Ford needs to consider the significant differences between ICE talent and EV talent, as well as between ICE customers and EV customers.
"ICE talent and the BEV digital talent are different. You can't ask ICE people to do certain things. It takes too long. The customers are different. The EV customers are not like our ICE customers."
As a result, Farley said Ford needs to cut inventory that sits on car lots, as well as do more business online and remotely. Success in the future demands a different approach, namely different talent and procurement strategies, he added.