A Ford electric truck is on display at the Electrification Expo in Washington, DC, on July 23, 2023.
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Ford It expects to launch a $30,000 all-electric vehicle that will be profitable in about two and a half years, Chief Executive Jim Farley said Friday at the Aspen Ideas Festival .
Farley did not reveal many other details about the vehicle, which is being developed by Ford’s “Skunk Works” team, but said its main competitors are expected to be Chinese automakers such as BYD and the much-anticipated entry vehicle from the U.S. electric vehicle leader Tesla.
Farley said Ford is focusing first on small electric vehicles rather than large all-electric trucks and SUVs, which have historically been the company’s gasoline-powered profit engines, because such vehicles “will never make money.”
“As (automakers), you have to make fundamental changes to be able to make profitable electric vehicles,” Farley told CNBC’s Julia in an interview. “The first thing we have to do is really invest all of our capital into Smaller, more affordable electric cars. “That’s what we’re finding right now with duty cycles that really match up. These huge, huge, huge electric cars, they’re never going to make money. Batteries are selling for $50,000… batteries buy forever. Sorry.”
A Ford spokesman later clarified that Farley was referring to larger vehicles such as the company’s Super Duty models or vehicles that require large battery packs to achieve 500 miles of electric range. He wasn’t referring to Ford’s current all-electric F-150 Lightning pickup truck or its next generation of electric vehicles.
Ford said earlier this year that it would delay production of its large three-row SUV at a Canadian plant to 2027 from an initial target of 2025. 2026.
Farley reiterated on Friday that Ford’s next generation of vehicles will be profitable.
He also said Americans need to “fall back in love” with small cars instead of large ones, which is important considering that most of Ford’s profits come from trucks and given that U.S. automakers have historically had trouble making money on smaller models. The statement is surprising.
“We have to start falling back in love with small vehicles. This is so important to our society and the adoption of electric vehicles,” Farley said Friday. “We just fell in love with these monster vehicles, and I loved them, but weight was a major issue.”
Ford’s electric vehicle division wholesaled 10,000 vehicles in the first quarter of this year and suffered a loss of US$1.32 billion. While the segment also includes software and other EV-related businesses, these losses amounted to a loss of $132,000 per vehicle sold by the segment.
Farley said it was critical for Ford to produce profitable electric vehicles over the next five years as Chinese automakers continue to expand globally.
“If we can’t make money on electric vehicles, our competitors have the largest market in the world, they already dominate the world, and they have established supply chains around the world,” he said. “If we do that in the next five years If we can’t produce profitable electric cars within the year, what will happen in the future? We’ll just shrink to North America.”
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