A New Standard Is Established by Ford, Which Follows in the Footsteps of Tesla's Sales Model

By adopting Tesla's concept of direct customer interaction to the greatest extent possible, Ford has established a new standard for traditional automakers.

To accomplish this goal, Ford will have to switch its whole array of electric vehicles over to being sold only online. Customers will use Ford's website to place their individualized orders, after which Ford will utilize the established franchise dealer network to deliver their products directly to their front doors.

The Chief Executive Officer of Ford, Jim Farley, has stated that the company's electric vehicles, such as the Mustang Mach E, will be offered for sale at predetermined prices that will not be open to haggling, and the company's dealerships will not be required to keep any inventory of these vehicles in stock. Even the procedure of picking up and delivering the vehicle will be done remotely, so going to the dealership will become discretionary at best and unnecessary at worst.

Farley anticipates that revenue from ride-sharing services will increase, and he suggests that Ford may develop a product that is catered exclusively to Uber and Lyft. Although significant expansion is not anticipated based on current estimates, ride-sharing services will continue to play a role in the future of mobility in some capacity.

There is a possibility that new forms of doing business will emerge, such as the option to rent a Ford electric vehicle on a short-term basis and pay either by the mile or by the day. You'll be able to hire a Ford F-150 Lightning during the week and drive a Mustang Mach-E over the weekend if you want to treat yourself.

China, which is quickly becoming an increasingly important market for electric vehicles thanks to its cost-effective manufacturing and robust demand, will also be the focus of attention.

It is anticipated that traditional automakers will have to undergo a process of consolidation and adaptation and that not all of them will be able to weather the shift. More than 300 billion dollars will be spent on the process overall, and the money that is spent needs to go toward developing the appropriate software and technology.

According to Farley, this will result in "the most exciting kind of land grab of money in our industry since the Model T," and it is anticipated that this will be profitable.

A big price war is imminent in the automotive sector, which is excellent news for customers because it means that prices for electric vehicles will drop considerably as a result of increased competition.

This will be made possible by drastically lower costs, as the present distribution strategy utilized by Ford adds approximately $2,000 more than that utilized by Tesla, primarily due to the costs associated with inventory and advertising.

For all intents and purposes, Ford does not intend to proceed with pricey advertising efforts for its electric vehicles, including commercials that air during the Super Bowl. Because a substantial number of reservations and sales of the F-150 Lightning and Mach-E occur without the use of advertising campaigns, word-of-mouth should be sufficient enough to meet your needs. In point of fact, Ford discovered that it was losing money by continuing to promote vehicles that had already been purchased.

It is important to note that Ford will continue to develop and sell vehicles powered by internal combustion engines through more conventional means. On the other hand, the multibillion-dollar development of electric vehicles will give birth to a new business model that imitates the direct-to-consumer sales of dedicated electric vehicle startups like Tesla.

The truth is out there.

According to Ford's sales strategy, they're mimicking Tesla's.

As predicted, Ford is taking a very aggressive approach to marketing electric vehicles, something even we are a little surprised by.

It's not out of the question that dealers and even politicians may take issue with the move toward direct-to-consumer sales, which is prohibited by law for franchise dealerships.

He even suggests that automakers embrace a startup attitude, which worked well for Tesla because the company was compelled to be frugal with its finances, as Farley does so. Cost-cutting measures like rethinking standard advertising strategies and focusing on reengineering battery cells demonstrate this.

In light of Ford's historic decision to rethink its whole business model, other traditional automakers may decide to follow suit, but the path ahead of them could be rocky.