By Michael Elkins
Ford Motor Company (NYSE:F) Chief Executive Officer Jim Farley attended a charity event Thursday night where he commented on Tesla’s (NASDAQ:TSLA) recent price cuts, saying that the decision reflects the pressure Tesla faces from competition and an ageing product line-up.
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.
Ford, he said, would focus on less-crowded segments like pickup trucks and vans.
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.
"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.
"You have to be able to respond quickly," to Tesla's strategy, he said. "That agility he's building is super important for everyone."
Farley said Ford was moving quickly to have a second-generation electric vehicle (EV) ready since the pace of product overhauls is far faster.
"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
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.
However, the company’s website late Thursday showed an increase in pricing for Tesla’s Model S and X in the U.S. An increase that comes just days after the electric vehicle company cut prices for the sixth time this year.
Tesla's Model S Plaid and Model X Plaid are now priced at $107,490, up from $104,990 earlier, while the price of the Model X is now roughly 2.6% higher at $97,490. The company’s Model S increased by around 2.9% to $87,490.
Tesla is readying a new version of the Model Y, code-named Juniper, but has not disclosed details.
Shares of F and TSLA are up 0.25% and 0.50% respectively in pre-market trading on Friday.