Ford CEO Believes Tesla's Early FSD Beta Release Was a Mistake

Producing automobiles was not an endeavor any company was able to embark on back in the day. There were a couple of industry giants that fought with each other for more market share and, on some controversial occasions, colluded to do a couple of illegal things to the detriment of unbeknownst consumers.

So, the big guys most likely kept an eye on the competition and a secret communication line open from time to time.

Yes, they had their cake and ate it, too.

“I hate them (i.e. GM) and their company and what they stand for. And I hate the way they're succeeding. (..). I'm a car guy. I wake up each morning thinking about cars. Watch out. We're only going to get better. I'm going to beat Chevrolet on the head with a bat. And I'm going to enjoy it," said Jim Farley, according to a quote from the “Once Upon a Car” book.

However, these customs and the obsession with not exploring alternative powertrains met their biggest enemy in 2008 – right as the world was entering a massive economic crisis. That’s when a newcomer who secretly took a Lotus Elise and changed almost all the internal components to turn it into a battery-electric vehicle decided to finally come into the spotlight.

Enter Tesla

The Tesla Roadster was sold to whoever was ready to pay around $100,000 ($141,700 in today’s money) or more for it, depending on the spec. The publicly available estimates say that around 2,500 Roadsters were sold worldwide during the four-year production period.

Looking back in time at how the startup was supposed to compete with behemoths like Toyota, BMW, or other domestic brands (who needed government funding at the time to remain afloat) and the production capacity it was capable of back in the day… you might have not given it any chance. Many believed Tesla had no chance of surviving in a shark-infested industry.

Some of our readers might even remember when big names from the auto industry were laughing about the prospect of BEVs becoming mainstream.

However, here we are 15 years later, and Tesla is the world’s most valuable car brand, as many governments around the world announce various types of bans for the fossil fuel-hungry internal combustion engine (ICE). America did it again and has an automaker with millions of customers who also got involved in the energy game before anyone else even dared to think about charging networks. Shall we add the fact that no middlemen are needed anymore?

But legacy automakers are slowly catching up, and other startups like Rivian have understood that it’s now a little bit easier to penetrate this market which was once considered a very conservative environment. There aren't that many parts going into a BEV, and the direct-selling model popularized by Tesla can help a lot with keeping pricing policies under control.

So, what does Ford CEO Jim Farley think about Tesla today, now that GM is in the midst of revamping its operations for the upcoming decade?

The dawn of zero-tailpipe emission friction

This year didn’t begin with a much-needed pause for the auto industry because Tesla applied some unbelievable discounts in North America and Europe – a move that took competitors by surprise. These steep price reductions sounded the alarm everywhere, but not much happened elsewhere. Ford tried to keep up with these discounts, but it was unable to match what Tesla did. That’s especially hard for the Dearborn-based carmaker if we’re to believe what it said last year regarding how the Mustang Mach-E didn’t generate any profits whatsoever.

But struggling with making and selling EVs, a new regulatory framework in the making, which is set to reflect ambitious environmental targets, and laws that reward those who prioritize America and its friends doesn’t mean that rivals are not closely monitored anymore.

Right as the National Highway Traffic Safety Administration (NHTSA) announced that Tesla was doing its third FSD Beta-related recall for almost all the cars that have the advanced driver-assistance system (that’s not making any of its EVs capable of autonomous driving), Ford’s Jim Farley said Tesla made a mistake in this regard.

“I don’t think they should have released their self-driving software. I think that was a mistake,” said the executive in a podcast.

Ford is also involved in the ADAS game, but, like General Motors, it chose a safer approach. The carmaker went with "hands-free driving" on mapped highways instead of promoting unfinished software that was misleadingly named from the get-go to inspire the capability of turning a BEV into an autonomous vehicle. BlueCruise and ActiveGlide are features customers must pay for if they want them. However, unlike Tesla's $15,000 FSD Beta, Ford charges only $600.

But Ford's boss might be right. FSD Beta has created a lot of headaches for Tesla, and it had to endure backlashes from regulators and haters because of it. To this day, there are people out there spending millions to convince others that Tesla is doing the wrong thing by allowing customers to play with FSD Beta.

Jim Farley also argued that the discounts introduced in January were another wrong thing done by Tesla because it risked turning its cars “into commodities.”

Since announcing the price reductions, Tesla’s used car inventory dropped to extremely low numbers, and the delivery times for vehicles such as the popular Model Y increased from a couple of weeks to two months. This signals that prospective customers might not care about getting the full $7,500 EV tax credit. The Treasury is expected to release its guidelines regarding the critical minerals part of the Inflation Reduction Act (IRA), which is expected to cut the EV tax credit in half sometime in March. Model Y deliveries are now expected to extend well into April.

Jim Farley, however, admitted that he “loves how they (i.e. Tesla) hold their people accountable for performance” right as the automaker revealed that it fired some employees because they did not improve their work results and not because they intended to unionize.

Finally, Ford’s CEO says Tesla’s Supercharging network “is a really cool thing” and admires that the company focuses on making EVs by prioritizing efficiency. “They just fight every day to get rid of waste,” said Farley. The executive also underlined that “Henry Ford would have loved that” display of obsession for making cars without bleeding money.