For the last two years, a small “skunkworks” at the Ford Motor Company has been working on a low-cost electric vehicle platform, according to Ford CEO Jim Farley. Farley revealed the existence of this new platform during the automaker’s quarterly financial results call with investors on Tuesday evening. The company is rethinking its electrification strategy, having now faced up to the reality that the current crop of EVs are too expensive for mass-market adoption to take off.
Ford was early to market with its Mustang Mach-E crossover, itself the product of a skunkworks-style development process: an internal group called Team Edison, formed to add some excitement to what was originally going to be a more boring compliance car. The team also took the bold step of making a fully electric version of the country’s bestselling vehicle, the F-150 pickup truck.
Demand for the electric F-150 Lightning appeared strong, but a series of price hikes has resulted in really expensive trucks languishing on dealer forecourts and Ford cutting production shifts to reduce output. The Mustang Mach-E is still selling, although with barely any growth year on year.
Ford also split its EV activities into a separate division, called Model e, which exposes just how much money this is all costing—a loss of $4.7 billion. That’s quite a lot more than the $3 billion it thought Model e would lose in 2023.
Farley said the company will develop smaller and cheaper EVs, although he did not announce any specific new models by name. “All of our EV teams are ruthlessly focused on cost and efficiency in our EV products because the ultimate competition is going to be the affordable Tesla and the Chinese OEMs,” he said.
“We made a bet in silence two years ago,” Farley said of Ford’s newest skunkworks. “They’ve developed a flexible platform that will not only deploy to several types of vehicles but will be a large install base for software and services,” he told investors.
Ford may scale back some of its battery factory ambitions, too. “One of the things we’re taking advantage of in taking some timing delays is rationalizing the level and timing of our battery capacity to match demand and actually reassessing the vertical integration that we’re relying on, and betting on new chemistries and capacities,” Farley said.
In 2023, Ford announced and then canceled a $3.5 billion plant to manufacture lithium iron phosphate battery packs in Michigan. But there are also three lithium-ion factories in the works in Kentucky and Tennessee.
Ford no longer expects Model e to be profitable by 2026, but Ford CFO John Lawler said that Model e would need to stop losing money “sooner or later.”
“EVs are here to stay, customer adoption is growing, and their long-term upside is central to Ford+,” said Lawler. “The customer insights we’re getting by being an early mover in electric pickups, SUVs, and commercial vehicles are invaluable—especially as we’re developing next-generation EVs that are going to surprise customers and be profitable within a year of launch.”
You aren’t gonna get one with union labor in the u.s. and even if it was made by non union labor either the workers would be horribly underpaid and/or the quality would be lower.
It’s not right to compare prices between countries with vastly different price levels. Are u.s. farmers doing the country a disservice by not selling pork for $0.50 a pound? No we accept that we make more and that we should pay our fellow Americans more so they can have the same quality of life we do. Ideally this solidarity should extend internationally but we should at least preserve it in the U.S.
China needs a $10,000 vehicle because that’s all there middle class making $20,000 can afford. The u.s. doesn’t, plenty of middle class Americans are buying new $30,000 cars, they just aren’t buying electric ones, they’re getting huge SUVs and pickup trucks. What the u.s. needs is to disincentivize or even ban people from buying large gas cars that don’t need them.
Eventually if everyone’s forced to get evs the used stock will turn into evs too and you’ll get your $10,000 ev without destroying the American auto industry and millions of good paying union jobs.
That’s going to be a fun time deciding who does and doesn’t need them. And deciding who decides that. Ill skip that jury duty please
It wouldn’t be too hard if you take it from the starting point of you need to prove that you need it, and that could basically just be answering the following questions
Maybe add in another exception for large families but station wagons filled that niche fine before SUVs came in. Either way these are very discrete and definable definitions.
We even already have the framework set up, semi trucks require different licensing and registration so that some random person can’t just buy a vehicle that can easily kill a ton of people accidentally. The way trucks are headed that argument continues to get more applicable.
That’s called the “invisible hand of the free market.”
Some dude name Adam Smith wrote a book about it, a few years ago.
The average new car buyer in the US are a childless couple in their late 50s.