Comparative Analysis of Technology, Strategies, and Operations: Tesla vs. Ford

Comparative Analysis of Technology Strategies and Operations: Tesla vs. Ford
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June 13, 2023
Henry Ford once said, "A market is never saturated with a good product, but it is very quickly saturated with a bad one." This quote illustrates the importance of prioritizing quality and innovativeness over quick profits in order to become a highly successful leader in one's industry. Accordingly, Tesla Inc. and Ford Motor Company, two pivotal entities in the automotive industry, each represent contrasting narratives and trajectories. On the one hand, Tesla, an innovator in electric vehicles and autonomous driving technologies, represents the thrust of the 21st-century automotive paradigm. On the other hand, Ford represents the more traditional legacy of the auto industry, albeit making significant strides toward innovation. In line with this, this paper's primary objective is to delineate a comparative study of these two behemoths' technological strategies and operations. Key focus areas will include their respective approaches to driving technology, AI applications, human-machine interactions, sales models, and advertising strategies. The chosen study topic is especially significant within the framework of this course, as it offers a keen understanding of how companies differing in their histories and cultures embrace and implement various technology strategies. The author believes that by juxtaposing the established Ford and the disruptive Tesla – we can glean insights into how different technological approaches can variably impact their operations and, consequently, their overall success.
Company Profiles
Founded in 2003 by Martin Eberhard and Marc Tarpenning and later propelled into the limelight by Elon Musk, Tesla Inc. has consistently positioned itself as a disruptive force in the automotive industry, specifically in electric vehicles (EVs) and autonomous driving technologies (Kolodny & Black, 2021). The company's business model revolves around manufacturing and selling electric cars and energy generation and storage systems. Additionally, its core technology focuses on battery technology, autonomous driving, and advanced human-machine interaction interfaces, including over-the-air software updates for its vehicles.
In contrast, the Ford Motor Company, established by Henry Ford in 1903, stands as a testament to the legacy of the automotive industry. This company's business model is traditionally built on manufacturing and selling a wide range of automotive vehicles, from small cars to commercial trucks, albeit with a recent emphasis on electric vehicles and autonomous driving technologies. Like Tesla, Ford has shown considerable interest in AI applications, autonomous driving, and enhanced human-machine interactions. However, the latter's approach to these technologies is deeply rooted in its established manufacturing expertise and extensive dealer network.
Technological Strategies
Thriving and competing in the period of sustainable and innovative technology, the technology strategy of Tesla Inc. embodies the company's mission "to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible" (Zucchi, 2022). This commitment to innovation and development is palpable in the company's continual refinement of electric vehicles and pioneering technological initiatives. For instance, in recent years, it introduced features such as Ludicrous Mode, regenerative braking, and over-the-air software updates that have set industry benchmarks. Furthermore, this approach is also shown in its use of Generative AI in production and products, highlighting its foresight in leveraging AI. Notably, Generative AI has been instrumental in optimizing Tesla's manufacturing processes and advancing its Autopilot and Full Self-Driving capabilities, to name a few (Marr, 2021). This still needs to state the company's technology investment strategy, which acquired and developed Maxwell Technologies in 2019, which has played a pivotal role in enhancing Tesla's battery technology (Korosec, 2019).
In contrast to the previously mentioned company, Ford Motor Company's Technology Strategy draws from its rich automotive legacy while incorporating a forward-looking approach. While Ford is one of the oldest and perhaps ‘traditional’ automotive manufacturers in the market, it also aims to become innovative to ensure its market share, among others. Thus, the company's focus on innovation and development is reflected in its global transformation plan, Ford+ (Ford, 2020). Ford has progressively embraced electric vehicle technology to realize these goals, illustrated by the launch of the Mustang Mach-E and the all-electric Ford F-150 Lightning. In terms of AI, the company has been utilizing predictive analytics in order to expand and enhance its production efficiency and vehicle safety features (Scimeca, n.d.). As for its technology investment and acquisition strategy, the company has also established a collaboration with Argo AI, investing $1 billion over five years to develop autonomous vehicle technology (Ford.com, 2017).
Comparison of Technology Operations
Just as the advent of AI has caused several disruptions, changes, and improvements in the supply chain and production capacities, these companies have carved new technology operations depending on their goals and function. For instance, arrival methods in Tesla's vehicles are increasingly characterized by autonomy. Tesla's Autopilot and Full Self-driving capabilities use eight cameras, ultrasonic sensors, and a forward-facing radar to provide various autonomous driving features (Tesla Inc., 2022). However, how do these capabilities fare regarding their automated technologies? In 2020, Tesla reported that vehicles equipped with Autopilot experienced a crash once every 4.53 million miles driven, which showed a promising lead in future automated driving (Lambert, 2020). However, Ford's Co-Pilot 360 does not claim full autonomy. However, it does offer a comprehensive suite of driver-assist features, including adaptive cruise control, a lane-keeping system, and automatic emergency braking (Ford, 2020).
Aside from safety, their product's ease of use is another thing to consider. Accordingly, a quick analysis of their latest models would show that Tesla's infotainment system, in terms of Human-Machine Interaction, is renowned for its simplicity and intuitiveness, with a large central touch-screen dominating the dashboard. In contrast, Ford's SYNC infotainment system blends touch-screen controls with physical knobs and buttons, offering users multiple interaction modalities (Monticello, 2023).
Sales Models
Now that some technological and innovative differences have been discussed, it is worth noting that Tesla and Ford diverge dramatically in their Sales Models. On the one hand, Tesla adheres to a direct-to-consumer sales model, with most of its sales made online. 2020 Tesla reported delivering nearly 500,000 vehicles (Rana, 2020). The author believes this sales model stemmed from the popularity of its executive officer, Elon Musk, who capitalizes on word-of-mouth marketing and social media exposure. In contrast, Ford continues with a traditional dealership model, which it has used for several decades. Using this same model, Ford delivered approximately 4.18 million vehicles worldwide in 2020, still representing its solid market position (Statista.com, 2023).
Overall, the previous section shows that Tesla's no-advertising strategy starkly contrasts Ford's traditional Advertising and Marketing Strategies. Tesla capitalizes on CEO Elon Musk's high-profile persona, word-of-mouth, and social media reach. In contrast, Ford utilized a variety of advertising mediums, with advertising costs amounting to $2.3 billion in 2019 (Calameo.com, n.d.).
Comparative Analysis of Technology Strategies
As mentioned, Tesla and Ford actively participate in the global shift towards electric vehicles and AI technologies. However, the two automakers have approached these transitions with fundamentally different strategies. Tesla has been a disruptive force in the automotive industry with its high-risk, high-reward strategy focusing on rapid innovation and sustainability (Furr, 2023). In contrast, Ford has a more conservative strategy that has evolved over its century-long history, focusing on incremental innovation and careful investment.
On the one hand, Tesla has unreservedly embraced cutting-edge technologies and incorporated them at the core of its products and operations. By dedicating 21% of its revenue to R&D in 2020, the company consistently makes significant investments in technological advancements and production improvements, in line with its desire to be the leading automotive provider in the future (Bajpai, 2021). On the other hand, Ford, with a well-established production process and vast customer base, maintains a more balanced and traditional approach to innovation. Although Ford has increased its investments in EV and AI, it spent only 4.1% of its revenue on R&D in the sa...