Tesla CEO Elon Musk Praises Ford's EV Strategy

Tesla CEO Elon Musk has complimented Ford's EV strategy, stating that overall it's "smart". Musk replied to a tweet discussing Ford's negative net margins on its EVs, stating that margins are always tough for new models.  

For every EV it sells, Ford is currently losing 40% on average. Worryingly, the Blue Oval is only projected to improve this negative margin by 20% in the future. Meanwhile, Tesla makes a 15-25% gross margin on every EV it sells. As for Tesla's net margin, it lies at roughly 10%.

 

Ford recently announced a $1.5-2 billion restructuring plan that will help its EVs reach profitability. Arguably the biggest change being introduced is a new staffing structure. It will see the bulk of Ford's engineering talent being relocated from Asia and Europe to the US.

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This is not the first time Elon Musk has shown support for Ford. Back in 2021, Musk congratulated Ford on the launch of the F-150 Lightning. He also Tweeted enthusiastically about the Mustang Mach-E following its reveal in November 2019. 

 

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Ford hopes to increase its annual EV production capacity to 600,000 units by the end of the year. For now, sales primarily consist of the Lightning and Mach-E with the E-Transit having a steady amount of commercial demand. However, the upcoming Explorer EV has the potential to be a future best-seller.

A compact crossover with up to 335 miles of range, the Explorer EV will be a compelling option for European and Asian consumers. Unfortunately, Ford has no plans to sell it in the US for now. That said, in the near future a larger variant similar in size to the ICE Explorer could be on the cards for North America.

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