Ford reveals ambitious plan to exploit rival Tesla's weaknesses and invests heavily in the electrification of its vehicles to gain leadership in the global electric car market

Ford has the potential to outperform Tesla if it can capitalize on its strengths and exploit its rival's weaknesses

Ford is one of the largest and most traditional automakers in the world, but that doesn't mean it's accommodated. On the contrary, the company is investing heavily in the transition to electric vehicles, which are the future of mobility. Check out how Ford is positioning itself to compete with giants like Tesla and become a reference in electric cars.

What is Ford doing to electrify its vehicles?

Ford has an ambitious plan to electrify its vehicles and offer more sustainable and innovative options for consumers. By 2026, the company will have spent $50 billion on vehicle electrification, which includes money for new factories and vehicle development.

One of the examples of this investment is the mega campus of electric vehicles that Ford announced that it will build in Kentucky and Tennessee, in the United States. This will be the largest investment in production by an automaker in one fell swoop, according to Ford itself. The campus will have the capacity to produce up to 600 electric vehicles per year and will generate around 11 direct and indirect jobs.

CONSTRUCTION – FREE MARKET

In addition, Ford is launching new models of electric cars that promise to conquer the public. One of them is the Mustang Mach-E, an SUV inspired by the brand's iconic sports car, which has a range of up to 480 km and can go from 0 to 100 km/h in just 3,7 seconds. Another is the F-150 Lightning, the electric version of the best-selling pickup truck in the United States, which has a power of 563 horsepower and can tow up to 4,5 tons.

Ford has a solid financial situation and its balance sheet is a competitive differentiator

To make this transition to electric vehicles and compete with companies like Tesla, which was born with this focus, Ford needs a lot of money. And that's where one of the company's competitive differentials comes in: the balance sheet.

A Ford has a solid financial position, with sufficient cash, credit and liquidity to fund its projects and face market challenges. The company ended the first quarter of 2021 with approximately $29 billion in cash and $46 billion in total liquidity. In addition, the cash on hand exceeds the automaker's debt by about $9 billion.

These numbers refer only to the automotive side of the business. Ford also has a large financing operation, with about $120 billion in loans. This is an important source of revenue for the company, which offers credit for its consumers to buy its vehicles.

Another positive point is that Ford has greatly improved the quality of its free cash flow in recent years, thanks to the restructuring of the business. In 2022, approximately two-thirds of Ford's $9,1 billion free cash flow can be attributed to automotive operations. In 2013, this percentage was only 25%.

Investors should pay attention to the automaker’s potential to generate value for shareholders

With this data in hand, it is clear that investors have no reason to worry about Ford's debt. The company is part bank and part manufacturer – like most other automakers – and it knows how to manage its balance sheet.

What investors should be aware of is the Ford's potential to lead the EV market and drive shareholder values. The company has an attractive product line, which combines tradition and innovation, and an aggressive strategy to expand its production capacity and market share.

Ford also believes that its electric vehicles will be almost as profitable as its traditional cars by 2026. This means that the company can increase its profitability and competitiveness in the long term.

Ford invests heavily to overtake Tesla

Tesla is today the undisputed leader of the electric vehicle market, with a global share of around 16%. The company has a technological edge and a legion of loyal fans who admire its founder. Elon Musk.

However, that doesn't mean Tesla is unbeatable. The company faces issues such as chip shortages, parts shortages, vehicle recalls and legal disputes. In addition, competition is increasing more and more, with other automakers entering the electric car segment.

A Ford can beat Tesla if it manages to take advantage of its strengths and exploit its rival's weaknesses. Some of Ford's strengths are:

• Its brand is strong and recognized worldwide;
• Its broad and consolidated network of dealerships and technical assistance;
• Its experience in producing vehicles on a large scale and with quality;
• Your ability to innovate and adapt to market changes;
• Your healthy and sustainable financial situation.

Some of Tesla's weaknesses are:

• His excessive reliance on the figure of Elon Musk;
• Its difficulty in meeting the growing demand for its vehicles;
• Your vulnerability to technical problems and product defects;
• Its lack of consistent and predictable profitability;
• Its high valuation in the stock market.

So if Ford can successfully execute its electrification plan and offer consumers affordable, reliable and desirable electric cars, it could surpass Tesla and become an industry benchmark.