Ford's secret weapon in EV battle: Michigan

As Ford Motor Co. begins to challenge Tesla's market dominance in electric vehicles, it's getting a boost from Ford-brand loyalty in its home state of Michigan.

In the first 10 months of 2021, Ford registered 1,235 Mustang Mach-E crossovers in Michigan, or about 21 percent of all EVs registered in the state during that time, according to data from Experian.

That was Ford's largest pool of registrations — by a substantial margin — among the nation's 20 largest states for EV registrations, Experian reported. The Mach-E, which is perceived as a competitor to Tesla's Model Y, accounted for less than 9 percent of registrations in the other states.

Tesla remains the top EV brand in Michigan, with 2,594 vehicles registered from January to October. However, its market share has dipped from about 53 percent of all Michigan EV registrations through the first 10 months of 2020 to about 43 percent during the same period in 2021.

Jessica Caldwell, executive director of insights at Edmunds, said Ford's success in Michigan stems in part from the automaker's significant presence in the state. Ford employees and retirees, as well as many employees of Ford's suppliers, get discounts that make the Mach-E less expensive to buy, she said.

"When you think of all of the suppliers in Michigan that get some sort of friends-and-family type of deal, I think that makes sense," she said.

But Ford's tailwind might also be coming from the Mach-E's appeal to both current Tesla owners and first-time EV buyers, Caldwell said. While the figures remain relatively low, the percentage of Teslas being traded in for Fords has risen over the past year, she said.

"People are quick to crown Tesla the king of the EVs, but it feels like it's so early in this race to call it," she said. "A lot of these buyers are more early adopters, so if something else cool comes along, I could see them abandoning Tesla and going for whatever the new, cool, shiny object is."

So far, Tesla remains the giant of the EV space. It accounted for about 69 percent of all EV registrations in the U.S. through the first 10 months of 2021, compared with 5.4 percent market share for Ford. The Model Y crossover alone accounted for about 36 percent of all electric registrations, with the Model 3 sedan making up 30 percent of the market, according to Experian.

But Tesla will face a major test in the coming years as it faces more competition, Caldwell said. For years, Tesla vehicles were seen by many consumers as the only attractive EV option, and buying one sent a social signal about one's status and values.

As Teslas become more commonplace, that appeal may fade for some, she said.

"I'm hearing that's already starting to happen in parts of the Bay Area, where Teslas are now so common that you no longer buy one to stand out or make a statement," Caldwell said. "So I don't think they're impenetrable."

Still, legacy automakers such as Ford, General Motors and Volkswagen have a long way to go to catch up, both nationally and in California, the country's largest market and the epicenter of national EV sales. Through the first 10 months of 2021, 92,640 Tesla vehicles were registered in California, or about 71 percent of all EVs in the state. Ford, with 5,262 registrations, accounted for 4 percent of California's EV registrations.

Ford CEO Jim Farley told Automotive News in November that the automaker wants to become the second-largest producer of EVs in the U.S. after Tesla within 24 months, with plans to produce 600,000 EVs per year.

Caldwell said Ford will face stiff competition to take that spot, but it has an advantage with its upcoming F-150 Lightning electric pickup.

"Everyone has the same goal. It's going to be a bit of a fight," she said. "But the F-Series has been the bestselling vehicle in this country for decades, and to produce the F-150 Lightning gives them a leg up in volume. Even just a fraction of that would put them into such a high-volume space."