"Tesla hasn't had any competition until Ford and others came along," Farley told Yahoo Finance Live on Friday (video above). "Now their prices are down like $7,000 in one year, so there's going to be more price competition in that market, and we're counting on that."
Tesla CEO Elon Musk didn't return Yahoo Finance's request for comment.
The race to take a bite out of Tesla's profitability is weighing on Ford in the near term.
Ford revealed Thursday it lost $2.1 billion on an operating basis in its Model E (electric) division last year. The automaker guided to an operating loss of $3 billion for the division for 2023 as it invests in production and battery capacity. The business is expected to reach profitability in 2026 with an 8% operating margin.
By comparison, Tesla's operating margin in 2022 was 16.8%. In 2021, it came in at 12.1%.
Ford could take out $7 billion in costs from its legacy auto business to help fuel its EV ambitions and bolster overall profit margins, the company's CFO John Lawler told Yahoo Finance Live this week.
The EV disclosures came as part of a "teach-in" for analysts at the New York Stock Exchange on Thursday as it pivots to an electrified future.
The event was aimed to help Wall Street better understand the inner workings of Ford by breaking out the business into three new segments: Model E, Ford Blue (gas-powered vehicles), and Ford Pro (commercial vehicles and other services).
Wall Street appreciated Ford's increased transparency but acknowledged reaching profits in EVs is key to getting the stock moving higher again.
"While this is clearly a momentous occasion for Ford as a company, we believe today is largely a non-event for the stock," EvercoreISI analyst Chris McNally wrote in a note. "We believe the key for Ford’s stock, from here, is to drive market confidence in the guided $6-8Bn swing in EV profitability expected between ’23 and ‘26/27. Similar to GM, we see Ford’s stock as range bound (between $10 and $14) while all OEMs deal with a “normalizing” incentive market over the next 12- 24 months."