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.
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.
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.