Ford changes stance on Tesla battery production strategy which has ‘no advantage’

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Ford Motor Company CEO Jim Farley has reversed his company’s stance on whether it will produce EV battery cells for its electric cars. After former CEO Jim Hackett said Tesla’s strategy to produce its own lithium-ion batteries for electric vehicles had “no benefits”, Farley seemed to recognize the benefits of cell-making and said he was “absolutely” interested in using the same methods as the world’s leading electric car maker.Farley was speaking at a recent automotive conference hosted by Reuters when asked about Ford’s strategy for sourcing batteries and cellular materials. After a question that highlighted Ford’s potential to produce its own cells instead of sourcing them from third-party suppliers, Farley replied, “Absolutely, we’re discussing this as a team.”

You’d think Ford would wait to see how its first EVs fare in terms of sales and demand numbers, but Farley believes there is enough evidence to start discussing the matter now. “We think it’s a natural moment now because our volume is really increasing,” he says.

Tesla’s battery strategy has ‘no benefits’, says Ford CEO

While Ford announced last Thursday the most recent addition to its fleet of electric cars planned with the launch of the E-Transit van, it now plans to produce three all-electric vehicles, like the Mustang Mach-E and the pickup. E F-150. joined the van. Ultimately, the decision to produce its own cells at one of its production facilities will reduce costs, as material sourcing and battery construction will reduce expenses. However, Farley is much more interested in avoiding supply constraints rather than worrying about price.

“There are a lot of other reasons beyond the cost of making a move,” Farley added at the conference. Admitting that “there isn’t a lot of flexibility to increase the capacity of third-party battery suppliers,” said Farley, according to CNBC, Ford can expect a more committed movement towards electrification. As more and more automakers plan to enter the electric vehicle market, many companies are likely to source electric vehicle batteries from suppliers like Panasonic, making it less available and thus increasing costs. This will likely force automakers to increase the prices of their vehicles, making electric vehicles less affordable for consumers.

Being one of the largest automakers in the world, Ford would likely see more advantages than disadvantages if it decided to create its own cells. Not only would it see lower prices, but it would avoid supply constraints, which would inevitably delay the production and delivery of vehicles.

This is not the first time that a legacy automaker has criticized Tesla for the first time, only to then reconsider its position. General Motors once said Tesla was “tied to the graveyard” because of its production strategies. A few years later, GM took inspiration from a million-mile battery cell, similar to what Tesla pursued after several years.

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