Ford Falls Far Behind Tesla and GM in Software

The Gartner Digital Automaker Index benchmarks auto companies on their potential to monetize their software. Tesla Inc. (NASDAQ: TSLA) ranked first among the 24 manufacturers considered. GM ranked ninth, while Stellantis, the maker of Jeep, Chrysler, and Dodge, ranked 12th. Ford Motor Co. (NYSE: F) ranked 15th, ahead of Toyota in the 21st position.

“Very few legacy automakers are positioned to compete with Tesla, Rivian or the leading Chinese EV makers when it comes to building a pervasive automotive operation system,” Tsuguo Nobe, a former executive at Intel and Nissan, who is now a professor at Nagoya University, told the Financial Times.

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Ford recently entered the second phase of building electric vehicles (EVs) and a new manufacturing system. It cannot afford to be so far behind its competition in the software part of the business, which is key to EVs. Ford invested between $20 billion and $30 billion in the first phase of EV development. Its current push will cost another $5 billion. That is about the same as Ford loses annually in its EV operations.

The study praised Ford for some of its early software efforts, particularly in its Pro division.

Ford has presented itself as a leader in the next generation of the global car industry. However, it sells very few EVs outside the United States. Its market share in America is less than 10%. Only a tiny fraction of its home market sales are EVs, and its EV sales volume in the first seven months fell compared to last year.

Ford management has said repeatedly that the Chinese automakers are well ahead of U.S. companies in EV features. The Gartner study shows that almost all the leaders in its study are Chinese EV manufacturers.

Ford’s future is digital. At this point, it is not doing well.

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