E -Mustang Sally

Volume 22 Letter 3

The Ford Motor company has thrust itself to the forefront of the EV market.  The Mustang Mach E was launched in 2021 and this year we’ll see the new Ford Lighting followed by a series of E-transit vehicles (think delivery vans).  But success didn’t happen overnight and with most businesses pivoting to new “Sustainable” markets there are lessons in the Ford story for all of us. Here’s what happens when urgency is met with good strategic planning rather than a knee jerk reaction.

Pre 2019, the “Gas Age”, every EV proposal at Ford was being judged under the same Net Present Value (NPV) lens as existing internal combustion models.  The end result was that no EV was ever going to get a foothold in the Ford line up.  The company became frustrated as across the country they could see the sky-high market valuations of tech first companies like Tesla (which at the time had no profits, very few sales, yet boasted a higher market capitalization than any traditional car manufacturer).  It was clear Ford needed a different approach.

The breakthrough came when Ford set up Team Edison and appointed long time Ford exec Darren Palmer with the mandate to do whatever it takes to get an EV program up and running in 30 months.   Very early Team Edison set an objective that ‘every EV from Ford will do things that gas cannot do’.  A Ford EV would NOT be a rehash of a traditional Ford car with an electric motor swapped in.  Their strategic steps are responsible for the success of Ford’s EV program today.

The market opportunity was about to explode as government regulations, new battery technology and a social desire for sustainability were all converging to create a vibrant EV market so Team Edison looked to Silicon Valley start-ups for inspiration.  They designed a flat organizational structure where anyone could join the conversation without worries about cratering their career.   Leaders cleared away the extraneous “stuff” so techies could get the real work done and the Edison team implemented a ‘no presentations’ rule – instead if you had something to show, you showed it.  All this was so counter to Ford’s culture that Team Edison needed to move off campus into their own facilities.

Next up Team Edison needed to determine “Where to Play and How to Win” – the Portfolio and Segmentation strategies.  Investing time to interact with EV owners in California, the Edison team realized that customers wanted a technology first product.  Secondly it became obvious that they needed to focus on the Ford icons – the Ford Mustang, Ford Utility (F150) Trucks and Ford Transit Vans.

The Mustang Mach E was the first EV developed by Team Edison.  Created as an SUV to play into that massive and fast-growing market, the Mustang prototype interface and software was designed and ready for testing over a weekend.  Today that interface is winning awards from JD Power.  The chassis design team had a prototype ready within three months followed quickly by mechanical design etc.  For a 100 year old company, Team Edison was burning rubber like a teenager.  The Mach E launched in 2021 and quickly sold out their 50,000 unit capacity.   Today 91% of Mach E customers recommend the car to friends and family.  It’s been the most successful launch of any Ford product.   The E Ford pickup truck, dubbed the Ford Lightning, has only one gear, no vibration and unbelievable performance.  One test customer stated, “Now I know what the future looks like – it’s silence”.  With no motor under the hood there is cargo space upfront, and customers are already talking about holding “front gate parties”.  As a bonus, the Lightning’s battery can act as a back up energy supply powering your home for 3 to 10 days.  With the launch price on par with the F150 – the Ford Lightning has had to cut off orders for 2022 at 220,000 and is scrambling to add more capacity.

What can Team Edison can teach us about strategy:

  1. Managing a start up portfolio is different from managing an existing portfolio. Team Edison knew the importance of a fresh start and a new way of thinking and working.
  2. Culture does eat strategy for breakfast.  Team Edison knew it needed to break free of the “Ford” culture in order to move fast and be nimble.
  3. Attack new Markets with your best shot:  Team Edison focused on E-design of the Mustang, the F150 and commercial van – all areas where Ford is traditionally strong.

Sometimes you need a new way of thinking and Ford corporate wisely set up a dedicated team to think outside the box and then cleared the decks to let them get on with it.  The results are exceeding their wildest dreams.  Now if they would just make that Mach E cabriolet we could get a E-remix of  “Mustang Sally” ……but its unlikely anyone will be able to “slow that Mustang down.”


More info listen to Darren Palmer on the EV Revolution – Bloomberg

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