By Paul Lienert and Ben Klayman

(Reuters) – Ford Motor Co must overhaul its century-old enterprise mannequin – from slashing promoting spending to transforming its vendor community – whether it is to earn sufficient revenue on electrical automobiles to compete with Tesla (NASDAQ:) and others, the automaker’s chief government stated on Wednesday.

The shift from inside combustion automobiles to EVs is “probably the most thrilling land seize in our trade because the Mannequin T” launched by Henry Ford in 1908, CEO Jim Farley stated at an Alliance Bernstein convention.

Because the competitors shifts from established gamers like Ford to newcomers from China and Silicon Valley, “the trade is heading to an enormous value warfare,” Farley stated.

Because of this, Ford is reviewing almost each facet of its enterprise simply months after Farley restructured the corporate into three items – Ford Professional for industrial prospects, Ford Blue for its worthwhile gasoline-powered vans and SUVS, and Ford Mannequin E for electrical automobiles.

Farley stated Tesla, which was based 100 years after Ford, enjoys a big price benefit that has satisfied the Michigan-based automaker to think about decreasing or eliminating vendor inventories of unsold automobiles and following Tesla in promoting some automobiles on to prospects.

He stated Ford might have “a number of tiers of sellers” and a few shall be extra specialised as the corporate launches a second era of electrical automobiles in about 4 years.

“Now we have this chance to make use of our bodily presence to outperform” newcomers, together with tech corporations, Farley stated, however future requirements for sellers “are going to be brutal. They are going to be very totally different than right now.”

Farley stated he was “not satisfied” that Ford must proceed shopping for promoting, particularly for standard new electrical fashions just like the F-150 Lightning, which is bought out for the primary 12 months. The U.S. automaker spent $3.1 billion on promoting final 12 months, in line with the corporate’s annual report, in comparison with nothing for Tesla.

“If you happen to ever see Ford Motor Firm (NYSE:) doing a Tremendous Bowl advert on our electrical car, promote the inventory,” he stated.