ford (F) – Get Ford Motor Company Report CEO Jim Farley is clear: Automaker’s big rival is Tesla (TSLA) – Get Tesla Inc report.
That means the legacy automaker aims to become the market leader in electric vehicles currently dominated by the makers of the Model 3 sedan and Model Y SUV. That ambition sometimes involves replicating the formulas that work at Tesla, such as performing over-the-air software updates to add new features and enhance existing ones over Wi-Fi.
Tesla says over-the-air software updates introduce new features and updates to your car, and software updates happen on a rolling basis.
Ford has undergone a radical and deep reorganization this year to separate operations from gasoline and electric vehicles, taking over that ingenuity from Tesla, which has the advantage of keeping vehicles in sync with technological innovation and fixing bugs or bugs. any failures or safety issues as soon as possible.
End of lease buyout option
The automaker just copied another change Tesla made. In fact, Ford just ended giving Ford EV customers the option to buy out their cars at the end of their leases.
The new changes affect binding contracts or lease agreements in 38 states. It will be deployed nationwide by the end of the year. It will affect all arrangements from June 15th.
Ford customers with leases before June 15 are not affected. This means they still have the option to buy out the car at the end of the lease.
The decision applies to three Ford electric vehicles currently on the market: the F-150 Lightning pickup/truck, the electric version of the best-selling F-150, the Ford Mustang Mach-E sedan and the E-Transit van.
Ford said the big change is due to the company’s desire to manage the recycling of batteries and other materials well, and also to make electric vehicles affordable.
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“Ford wants to make electric vehicles more sustainable, reduce battery costs, and ultimately help more Americans can buy and afford electric vehicles.”
“Ford’s battery strategy includes recycling and localizing battery production, Ford Credit’s electric vehicle leasing program enables customers to replace their vehicles with the latest models at the end of the lease, while keeping vehicles in the Ford network for longer so that Ford can Better management of battery recycling and materials.”
Ford is investing $30 billion in electrification by 2025, with plans to build a global battery center in Romulus, Michigan, the Ford Ion Park, designed to “drive high-capacity battery delivery to provide customers with better range and lower cost”.
Will it boost Ford’s profits?
But Ford decided to no longer offer its EV customers the option to buy a car at the end of the lease period, at a time when vehicle prices, especially EVs, have risen sharply.
In fact, the EV market benefits from several factors: Russia’s war in Ukraine has fueled skyrocketing per-gallon prices at gas stations, which has boosted demand entirely. The disruption to supply chains caused by the Covid-19 pandemic is also encouraging consumers to give electric vehicles a second chance. This increase in demand, which translates into full orders, has prompted automakers to raise prices.
By revoking the buyout option, Ford is indirectly encouraging its customers to buy new cars, which is good for the automaker because new cars cost so much more.
“Beginning June 15, 2022, for new leases of the F-150 Lightning, Mustang Mach-E and E-Transit Van EV, customers will be able to return the vehicle and renew at the end of the lease, or they can return the lease at the end of vehicles at the time,” Melot said.
Tesla made a similar decision last April. Elon Musk’s team announced that, as of April 15, it will no longer be possible to purchase a rental car at the end of a lease.
“All Tesla vehicles delivered on or after April 15, 2022 are not eligible for purchase. Third-party dealers and third-party individuals are not eligible to purchase rental vehicles,” the company said.