Ford Exec Stands Firm on Delaying Gen 2 EVs Until New Platform Proves Profitable

Blue Oval’s Latest Creation Takes on Tesla and Chinese EV Brands Once Losses Are Reduced

According to Ford CEO Jim Farley, a “skunkworks team” has been covertly developing a budget-friendly electric vehicle platform to compete with Tesla and Chinese automakers.

During a recent earnings call, CEO Jim Farley announced a surprise development within Ford. He highlighted the small team responsible for this achievement, stating that they are “some of the best EV engineers in the world.” This team has been operating independently from Ford, functioning more like a startup. In the past two years, they have successfully created a versatile electric vehicle platform that will be utilized for various vehicles. Additionally, this platform will serve as a foundation for software and services.

Apart from that, no further information was disclosed. Nevertheless, the charming CEO did mention that the fresh platform strives to be inexpensive, with the main objective being to rival budget-friendly Chinese imports and Tesla, which persists in reducing prices and generating high earnings.

Ford Q4 2023 Earnings Call LIVE | $F

The Mustang Mach-E Select, priced at $42,995, is the latest addition to the Blue Oval’s range of electric vehicles. In comparison, the Tesla Model Y comes with a price tag of $43,990, but is still qualified for the attractive EV tax credit incentives. And even without any deductions, the updated Model 3 is still more affordable at a base price of $38,990. It’s worth noting that Tesla has plans to release a budget-friendly compact crossover next year as well.

There is uncertainty surrounding the usage of this recently introduced platform for Ford’s Gen 2 lineup of electric vehicles. However, it is presumed that this will indeed be the case. As for the upcoming generation of Ford EVs, Farley emphasized their profitability, stating that they are being carefully crafted to generate maximum profit. He also mentioned that these vehicles are expected to start generating profits for Ford within the first 12 months of their release. This comes after the company’s acknowledgement last year that they were losing $36,000 on each electric car sold, highlighting the need for a reassessment of their EV strategy.

According to John Lawler, the Chief Financial Officer of Ford, the main concern with their first generation vehicles is the decline in revenue and their lack of cost efficiency. Lawler emphasized the importance of enhancing the cost structure of these electric vehicles before considering the launch of second generation cars. He stated, “We will not introduce Gen 2 vehicles unless we can achieve profitability and a return on our investment.”

According to Farley, Ford plans to decrease its investment in larger electric vehicles. However, he mentioned that the next generation versions of popular models such as the F-150 Lightning and E-Transit will be more efficient and packed with cutting-edge design and features.

“Our main priority for our EV teams is to prioritize cost and efficiency in our EV products,” stated the CEO. They emphasized the importance of being competitive against the affordable Tesla and Chinese OEMs. “If we had to make an educated guess, we anticipate that our low-cost platform will first be used for a compact crossover that will be positioned below the Mach-E. Our goal is to target a price range of $30,000-$40,000 for this model.”