Ford CEO Announces Affordable EV Platform to Rival Tesla and Chinese Manufacturers
During an earnings call, Ford CEO Jim Farley announced that a “skunkworks team” has been diligently working on the development of a new EV platform. According to Farley, this team has been operating as a “startup” outside of the traditional company structure for the past two years. Their main focus has been on creating a low-cost electric platform. This newly designed platform is set to serve as the foundation for multiple upcoming vehicles.
According to Farley, the main objective of this platform is to offer affordable options, although details about these new vehicles are currently unclear. Despite the fact that EV buyers tend to show strong loyalty to electric vehicles once they have made the switch, the high initial costs have hindered the transition process, causing it to progress at a slower pace than originally anticipated. As Farley elaborated, the purpose of the new platform is to compete against “affordable Teslas and Chinese OEMs”, which he identifies as the primary rivals in the EV industry.
In recent news, it has been revealed that Tesla’s Model Y is now more affordable than Ford’s Mustang Mach-E by a significant margin. Additionally, Tesla’s most economical option, the Model 3 sedan, is almost $8,000 cheaper. Interestingly, despite their higher price points, Ford has not been able to generate a profit from these luxury vehicles. On the contrary, they have suffered a loss of $4.7 billion on electric vehicles in 2023. As a result, their new skunkworks-developed platform will prioritize profitability above all else.
According to Farley, the upcoming platform will serve as “a significant base for software and services.” Although no specific services were mentioned, Ford currently provides their hands-free driving system, BlueCruise, for a monthly fee of $75. The company’s truck division, Ford Pro, which focuses on fleet and work vehicles, experienced a 50% increase in software subscriptions in 2023 for features like vehicle telematics and charging patterns. Ford executives emphasize that these subscriptions are highly profitable. With the introduction of the new generation of electric vehicles in 2026, which the company has stated must be profitable unlike the current generation, it is possible that there will be a wider range of subscription options available. This could be concerning for those who prefer to make a one-time payment for features like heated seats.