Ford’s electric truck is on display at the Electrify Expo DC on July 23, 2023 in Washington, DC.
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Ford Motor Company The company plans to launch a profitable, $30,000 all-electric vehicle within about two and a half years, CEO Jim Farley said at the Aspen Ideas Festival on Friday.
Farley didn’t offer many details about the vehicle, which is being developed by Ford’s “Skunk Works” team, but said his main competitors are expected to be Chinese automakers, including: BYD The entry-level vehicle we expect from the US EV leader Tesla.
Farley said Ford is focusing on small EVs first, rather than the large, all-electric trucks and SUVs that have traditionally been the company’s gas-powered profit drivers, because those vehicles “will never be profitable.”
“We need to make fundamental changes. [automaker] “You’re trying to make a profitable EV. The first thing you have to do is put all your capital into smaller, more affordable EVs,” Farley said in an interview with CNBC’s Julia Boorstin. “That’s the really sweet duty cycle that we’ve just found ourselves in. These big, giant EVs are never going to be profitable. The batteries are $50,000. … Batteries are never going to be affordable.”
A Ford spokesman later clarified that Farley was referring to larger vehicles such as the company’s Super Duty models and those that require huge battery packs to achieve an electric range of 500 miles, not vehicles like Ford’s current all-electric F-150 Lightning pickup truck or its next-generation EV.
Ford said earlier this year that it would delay production of a large, three-row SUV at its Canadian plants from 2025 to 2027. It also delayed production of its next-generation pickup, codenamed the T3, from late 2025 to 2026.
Farley reiterated Friday that Ford’s next-generation vehicles will be profitable.
He also said Americans need to “fall in love again” with small cars instead of larger ones — a surprising statement given that Ford makes most of its profits from trucks and that U.S. automakers have historically struggled to make a profit on small cars.
“We have to get our love for small cars back. This is really important for our society and for the adoption of EVs,” Farley said on Friday. “We’re in love with these big cars, and I love them, but the weight is a big problem.”
Ford’s electric vehicle division, which includes EV-related businesses such as software, lost $1.32 billion in the first quarter of this year on wholesale sales of 10,000 vehicles, translating to a loss of $132,000 for every vehicle the division sold.
Farley said it’s important for Ford to build profitable EVs over the next five years as Chinese automakers continue to expand globally.
“If we can’t make EVs profitable, we have competitors who have the largest market in the world, who already dominate the world, who have supply chains all over the world,” he said. “If we can’t make EVs profitable in the next five years, what’s the future? We’re just going to shrink to North America.”
