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, where Tesla's best-selling Model Y faces a range of newer rivals in China and other markets.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.
"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. Farley said Ford was moving quickly to have a second-generation electric vehicle ready since the pace of product overhauls is happening far faster pace with EVs than with other cars.
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.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.
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