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Why Ford Paid Big Bucks for a Tesla Model X

By John Rosevear - Apr 20, 2016 at 2:04PM

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The Blue Oval is said to have paid $55,000 over sticker for a very early example of Tesla's new electric SUV. What's that about?

Hot property: A new report says that Ford paid $55,000 over sticker to buy a very early Tesla Model X. Image source: Tesla Motors.

Ford Motor Company (F -2.72%) apparently paid big bucks to own one of the first of Tesla Motors' (TSLA -6.42%) new Model X SUVs. According to a Bloomberg report, the Blue Oval paid $199,950, some $55,000 over the sticker price, to buy the 64th Model X built. 

Is this evidence that Tesla has gotten inside Detroit's collective heads?

Why Ford was eager to own a Tesla
According to the Bloomberg report, the Model X in question was bought by a Tesla Model S owner who had been rewarded for referring other buyers to the Silicon Valley automaker with a chance to buy an early Model X. He did so, and immediately resold the vehicle to a dealer in Chicago. From there, it found its way to a Michigan dealership that sold it to Ford. 

But why would Ford want a Model X so badly that it was willing to pay a huge premium?

The answer is that it's quite common for an automaker to buy important new products from rivals, even if the automaker has to pay extra to do so. It's a safe bet that Ford has already put its new Tesla through a battery of tests to see how it performs, and to understand how it was built.

Key Ford executives and engineers have probably spent time driving the Tesla. Ford engineers may have even taken the new electric SUV apart and put it back together again. (If not, they will.) 

Ford CEO Mark Fields said, at one point, that the Blue Oval had done exactly that with a Model S. And it's a safe bet that General Motors (GM -1.99%) and other big automakers are doing much the same thing with the latest Tesla. (And that's probably why Ford was willing to pay a big premium for an early car -- because it knew that rivals would be looking to do the same thing, and it didn't want to be behind.) 

It's not just about Tesla. This is common practice in the auto industry with any interesting new product. Ford has probably taken apart one of the latest Chevrolet Corvettes, too, along with a new-for-2016 Toyota Prius, and probably lots of other competitors' vehicles, as well. And it's a sure thing that GM had a few Ford Mustangs around while it was developing its new Camaro, and that Toyota's hybrid experts have spent some time in, around, and under the latest Chevy Volt. 

This kind of thing has been happening for decades. I remember reading that GM engineers had bought several expensive European luxury cars in order to examine their front-suspension designs while engineering a new Cadillac -- in 1930. And likewise, more recently, Mercedes and BMW engineers have probably spent time with a Cadillac CTS (and with Teslas, too). 

The upshot: Not much to see here
It's a fun story. And it's fun for Tesla fans to see that Detroit is looking to learn from the upstart Silicon Valley automaker. But the takeaway is that this kind of thing happens all the time, for competitive-intelligence reasons -- and sometimes, just out of curiosity. There's really not much to see here.

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Ford Motor Company Stock Quote
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