{"id":18653,"date":"2023-04-21T03:49:31","date_gmt":"2023-04-21T03:49:31","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/musks-price-cuts-show\/"},"modified":"2023-04-21T03:54:17","modified_gmt":"2023-04-21T03:54:17","slug":"musks-price-cuts-show","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/musks-price-cuts-show\/","title":{"rendered":"Musk’s price cuts show challenge for Tesla’s product strategy -Ford CEO"},"content":{"rendered":"

DETROIT (Reuters) – Electric car giant Tesla’s decision to cut prices to drive up sales volume reflects the pressure it faces from competition and an ageing product line-up, Ford Chief Executive Jim Farley said on Thursday.<\/p>\n

Farley said Tesla’s price cuts underscore intense competition in the two-row crossover or SUV segment of the auto market, where Tesla’s best-selling Model Y faces a range of newer rivals in China and other markets. <\/p>\n

Ford, he said, would focus on less-crowded segments like pickup trucks and vans.<\/p>\n

But Tesla’s ability to adjust prices quickly, and its “reductive” focus on squeezing costs out is a competitive advantage, and other automakers would have to follow its lead in cutting prices, Farley said.<\/p>\n

Tesla’s share price dropped almost 10% on Thursday, cutting more than $50 billion from its market value, after Musk said the company would discount as needed to drive up demand.<\/p>\n

“Honestly, anyone surprised at this, I don’t understand,” Farley told reporters, speaking on the sidelines of a charity event on Thursday evening in Detroit. <\/p>\n

“You have to be able to respond quickly” to Tesla’s strategy, he said. “That agility he’s building is super important for everyone.”<\/p>\n

Farley said Ford was moving quickly to have a second-generation electric vehicle (EV) ready since the pace of product overhauls is happening far faster pace with EVs than with other cars.<\/p>\n

“We used to think we would have a model year,” Farley said. “Now with Model e, four times a year we have a model year,” he said in reference to the pace of change for electric vehicles.<\/p>\n

Musk said this week that Tesla would be able to cut prices now – even potentially to zero profit – and earn more later on software and services when it has technology available that allows for autonomous driving.<\/p>\n

Many analysts are skeptical about that projection.<\/p>\n

Tesla is readying a new version of the Model Y, code-named Juniper, but has not disclosed details. Since January, Tesla has cut the price of the long-range version of the Model Y by $13,000 in the U.S. market. <\/p>\n

Although Tesla pushes frequent software updates to customers, the Model Y has not had a major, visible redesign since its first deliveries in 2020.<\/p>\n

“I think what he’s going to learn is that product freshness matters a lot,” Farley said of Musk.<\/p>\n

Ford’s own history has a cautionary note for Musk, who appears to be modeling the Tesla playbook on what Henry Ford did, Farley said. <\/p>\n

Ford drove down costs for the Model T and created a mass market with production innovation. But it failed to respond to customer demands and new competition, with Henry Ford famously insisting the only color available would be black.<\/p>\n

“You could have had red or green, but it took them 10 years,” Farley said.<\/p>\n

\n

(Reporting by Jospeh White in Detroit; Editing by Kevin Krolicki and Kenneth Maxwell)<\/p>\n

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DETROIT (Reuters) – Electric car giant Tesla’s decision to cut prices to drive up sales volume reflects the pressure it faces from competition and an ageing product line-up, Ford Chief Executive Jim Farley said on Thursday. Farley said Tesla’s price cuts underscore intense competition in the two-row crossover or SUV segment of the auto market, […]<\/p>\n","protected":false},"author":8,"featured_media":18654,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1213],"tags":[],"class_list":["post-18653","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-business"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ3K03C-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/18653","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=18653"}],"version-history":[{"count":1,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/18653\/revisions"}],"predecessor-version":[{"id":18655,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/18653\/revisions\/18655"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/18654"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=18653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=18653"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=18653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}