Though he is not as controversial and is much more risk-averse than Tesla (TSLA) CEO Elon Musk, the figurehead of its main rival in the United States, Ford CEO Jim Farley is seeking to challenge the status quo as the leader guiding one of the country's established automobile firms.
For instance, he proposed that Americans drive smaller cars to help promote increased EV adoption, arguing that the American appetite for bigger vehicles requires bigger and more expensive batteries.
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In a recent interview, he declared that his car company is in the "iconic car business," and it fully intends to make cars that mirror the successful nameplates from its illustrious past.
However, with his latest move, Farley hopes to give Ford (F) a significant edge over the most illusive product that its electric rival Tesla touts as best in the industry — and it isn't a new truck.
Ford
Ford's has a huge BlueCruise bet
Ford is betting heavily on its BlueCruise hands-free highway driving assistant for drivers of compatible Ford vehicles in the United States.
Starting in October 2024, a month of BlueCruise will drop from $75 per month to just $49, while a yearly subscription to the feature will drop from $800 a year to just $495. Additionally, Ford is discontinuing its $2,100 option to buy three years of BlueCruise on 2025 model-year vehicles, and in place is an option to buy the feature for the life of the car for a one-time fee of $2,495.
The $2,495 opt-in subscription-free purchase option will be available to Ford customers buying compatible cars new at the dealership and as an upgrade to 2024 models.
Ford
Currently, BlueCruise is available as a feature on select Ford models, including its electric offerings: the F-150 Lightning EV and Mustang Mach-E crossover SUV. It also offers it on its marquee gas-powered offerings: the Explorer and Expedition SUVs and the F-150 pickup truck.
Ford offers a 90-day "free trial" of BlueCruise to new owners of compatible vehicles; however, Ford's pricing structure for its ADAS technology differs heavily from that of Tesla and its Full-Self Driving service.
To get the equivalent set of software on Tesla vehicles, one would need to configure them with Full-Self Driving, a tick in the limited Tesla options book that can cost a whopping $8,000 as a permanent add-on or a $99 monthly subscription to the service itself.
Previously, the feature used to cost an eye-watering $12,000, and to get eager Tesla beavers on board, the automaker offered a month's trial of the feature for free, which did not have much takers after the period.
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Both Tesla and Ford's novel software are under the microscope of regulators within the federal government regarding the safety concerns they pose to other motorists.
On April 26, the National Highway Traffic Safety Administration (NHTSA) published the results of a nearly three-year probe into the safety of Tesla's Autopilot and Full Self-Driving technologies. The probe found that the software did a bad job of keeping drivers engaged and that its name misled drivers into thinking that their Tesla vehicles were in more control than they were.
Last month, Pennsylvania police issued double homicide charges against the driver they accused of causing a highway crash in Philadelphia that left two people dead back in March. The driver was found to be under the influence of alcohol when her Ford Mustang Mach-E hit the stationary car.
Investigators said the driver was traveling at about 71 mph and using both Ford BlueCruise and Adaptive Cruise Control at the time of the crash.
Ford hopes a big payoff is coming
Nonetheless, BlueCruise is a small cog in Ford's bigger initiative to find pockets of profit in an otherwise unprofitable EV business.
In the latest publicly available results, Q2 2024 saw Ford's Model-E EV division lose $1.1 billion in EBIT. However, BlueCruise is a small divot in a larger software portfolio that Ford sees as a money maker. This includes monitoring software for commercial and fleet vehicles and navigation systems for passenger cars.
During Ford's Q2 2024 earnings call in July, Ford CEO Jim Farley boasted that over 765,000 people subscribe to at least one of its full line of paid subscription products and that the company is "on track for double-digit growth this year" from just software subscriptions alone.
"We are targeting $1 billion of revenue next year for our software," Farley said. "This revenue has gross margins of 50-plus percent, which drives significant operating leverage and improved capital efficiency."
Ford Motor Company, which trades under the symbol F on the New York Stock Exchange, is up 0.005% today, trading at $10.49 at the time of writing.
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