Ford unleashes a new price advantage over Tesla’s illusory technology

Although not as controversial and much more risk averse than Tesla (TSLA) CEO Elon Musk, the main character of his rival in the United States, Ford CEO Jim Farley, is trying to challenge the status quo as the leader who runs one of the established automobile firms in the country.

For example, he proposed that Americans drive smaller cars to help promote increased adoption of electric vehicles, arguing that America’s appetite for larger vehicles requires larger and more expensive batteries.

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In a recent interview, he stated that his car company is in the “flagship car business” and fully intends to produce cars that mirror the successful nameplates of its illustrious past.

However, with his latest move, Farley hopes to give it to Ford (F) a significant advantage over the most illusive product that its electric rival, Tesla, considers the best in the industry – and it is not a new truck.

Ford BlueCruise in use in a Ford Mustang Mach-E

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Ford is betting big on BlueCruise

Ford is betting big 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 an annual subscription to the feature will drop from $800 per year to just $495. Additionally, Ford is waiving the $2,100 option to buy three years of BlueCruise on 2025 model-year vehicles, and there’s an option to buy the feature for the life of the car for a one-time fee of $2,495.

The $2,495 subscription-free purchase option will be available to Ford customers who purchase compatible cars new from the dealership and as an upgrade on 2024 models.

Ford Expedition 2025

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BlueCruise is currently available as a feature on select Ford models, including its electric offerings: the F-150 Lightning EV and the Mustang Mach-E crossover SUV. It also offers it in its flagship gas offerings: the Explorer and Expedition SUVs and the F-150 pickup truck.

Ford is offering a 90-day “free trial” of BlueCruise to new owners of compatible vehicles; however, Ford’s pricing structure for its ADAS technology differs greatly from that of Tesla and its Full-Self Driving service.

To get the equivalent set of software on Tesla vehicles, you’d have to configure them with Full-Self Driving, a tick in Tesla’s limited options book that costs $8,000, plus a $99-a-month subscription to the service itself.

Previously, the feature used to cost $12,000, and to get eager Tesla beavers on board, the automaker offered a free one-month trial of the feature, which didn’t have many takers after the period.

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Both Tesla and Ford’s new software are under the microscope of federal government regulators for the safety concerns they pose to other drivers.

On April 26, the National Highway Traffic Safety Administration (NHTSA) released the results of a nearly three-year investigation into the safety of Tesla’s Autopilot and Full Self-Driving technologies. The probe found that the software did a poor job of keeping drivers engaged and that its name misled drivers into thinking their Tesla vehicles were more in control than they were.

Last month, police in Pennsylvania filed double homicide charges against the driver they accused of causing a Philadelphia freeway crash that killed two people in March. The driver was found to be under the influence of alcohol when her Ford Mustang Mach-E struck the parked car.

Investigators said the driver was going about 71 mph and was using both Ford BlueCruise and Adaptive Cruise Control at the time of the crash.

Ford is hoping for a big payoff to come

However, BlueCruise is a small cog in Ford’s larger initiative to find pockets of profit in an otherwise unprofitable electric vehicle business.

In the most recent publicly available results, Q2 2024 saw Ford’s Model-E EV division lose $1.1 billion in EBIT. However, BlueCruise is a small part of a larger software portfolio that Ford sees as a money maker. This includes monitoring software for commercial and fleet vehicles and car navigation systems.

During Ford’s Q2 2024 earnings call in July, Ford CEO Jim Farley boasted that more than 765,000 people subscribe to at least one of its full line of paid subscription products and that the company is “on track to double digit growth this year” from software alone. subscriptions only.

“We’re targeting $1 billion in revenue next year for our software,” Farley said. “This revenue has gross margins in excess of 50%, leading to 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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