Reverse engineering is a big part of advancing automotive technology, and Ford CEO Jim Farley performed a Tesla teardown that revealed something unexpected.
Jim Farley did what every carmaker does when they want to see how they stack up against the competition: he took apart their vehicles piece by piece. What he found stopped him in his tracks. Ford’s Mustang Mach-E had nearly a mile more wiring than a Tesla Model 3. When his team dismantled Chinese electric vehicles, the gap was just as eye-opening.
Going in a different direction based on the results
Those teardowns convinced Farley that Ford needed to change course fast. He created a new division called Model E in 2022, knowing full well it would bleed money at first. The division lost over $5 billion in 2024 alone, but Farley saw it as the cost of staying in the game. He’s betting big on EVs even though they only make up about 5% of U.S. car sales right now. The Ford Model E division losses should be short-term, and Ford fully expected EVs to be the future of the automotive industry, despite the current landscape.
Is America going in the wrong direction?
When Ford CEO Jim Farley performed his Tesla teardown, followed by the same action on a Chinese EV, he learned how far behind Ford is comparatively. Chinese electric vehicles pose a serious threat to American models if allowed to be sold in America. The comparison of the wiring found in the Mustang Mach-E vs Tesla Model 3 is not only proof of wasted wiring, but also costs that could be saved in the final price of Ford EVs. This caused the Ford CEO to ensure a strong investment in EVs through 2027, pushing forward despite the difficult landscape that American automakers face.
Currently, the EV market is sluggish at best in America. While electric vehicles continue to sell strongly and increase rapidly in other markets, the loss of the federal EV tax credits, coupled with the change in government administrations and environmental stances, has created an extremely steep uphill slope for EVs in America.
What’s at stake?
The stakes are higher than just catching up with Tesla. Farley calls Chinese automakers an “existential threat” that could push American carmakers out of business if they take over the North American market. Ford is pouring another $5 billion into electric vehicle production and working on a $30,000 electric pickup truck set to drop in 2027. For Farley, walking away from EVs means giving up on being a global player, and that’s not an option.
There’s more to this problem than what Ford CEO Jim Farley discovered during a Tesla teardown
Tesla is an American EV automaker and the largest competitor to all American automakers in the EV market. That said, Tesla faces the same challenges as legacy automakers, but in a much different way. Ford continues to focus on building electric vehicles and has a small electric pickup truck in the works. This new Ford EV truck could be the electric answer to the high cost of EVs, which many Chinese automakers have already solved. Currently, Chinese automakers aren’t selling EVs in the United States, but that might not last forever, and American automakers need to be ready to compete in terms of cost.
Farley believes shareholders should have insight into a company’s operations, providing as much transparency and clarity as possible. The investment in the future EV market is an important step for Ford and is supported by Farley’s statement:
“My ethos is, take on the hardest problems as fast as you can and do it sometimes in public because you’ll solve them quicker that way.”
– Jim Farley
2025 might be the wrong year to review
The strange EV market of 2025 will likely show incredible sales increases in the third quarter, followed by a share decline for the fourth quarter of the year. Now that the federal EV tax credits are gone, will EVs survive in America? That is a question facing all automakers. It’s imperative that legacy automakers figure out the electric vehicle challenges, and continue to provide drivers with excellent vehicles.
The Ford CEO Jim Farley Tesla teardown is only part of the problem facing the current EV market in America. Hopefully, all automakers, including Tesla and Rivian, will be able to weather the storm of slow sales and keep Chinese EV companies away. If not, the brands coming from China are likely to undercut American brands in the EV market.
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