Electric Cars News

Ford moves to more affordable EVs, says its open to partnering

Ford is open to partnering with the competition on affordable EVS to get a leg up on Chinese EV makers. Jim Farley, Ford’s CEO, said if you cannot compete with the Chinese, “then 20% to 30%” of your revenue is at risk.

Speaking at a Wolfe Research conference Wednesday, Farley explained, “As the CEO of a company that had trouble competing with the Japanese and the South Koreans, we have to fix this problem.”

Ford’s leader explained that the company “decided pretty quickly to bet on smaller EV platform.” He said since the middle of 2023, “We have assumed that we have to basically sell an EV at a hybrid premium. There is no more money for customers than that.”

Farley admitted larger EVs, like the F-150 Lightning, are costly to build. He said, “What the customer has now said to us is, if you have anything larger than (the) Escape, it better be really functional or a work vehicle, as an EV.”

Meanwhile, with smaller EVs, “it’s totally different.” Farley said with an Escape-sized electric car or smaller, “it completely works.”

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Ford limited-edition matte black F-150 Lightning (: Ford)

In fact, Farley said, “It’s dramatically better operating cost than a (Toyota) Corolla or a (Honda) Civic or even a (Ford) Maverick.”

Ford moves to affordable EVs

Although Ford’s pivot to more affordable EVs may not be apparent yet, “we have made it,” Farley stated Thursday.

The comments come after Farley revealed Ford had been “secretly” working on a low-cost EV platform last week. Ford assembled a “super-talented skunk works team” to develop it with “some of the best EV engineers in the world,” according to Farley.

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Ford Mustang Mach-E GT Bronze edition (: Ford)

The platform will rival affordable EVs from Chinese automakers like BYD. Farley pointed out that BYD can produce its Seagull EV for $9,000 to $11,000 in materials.

BYD is launching its low-cost Seagull (Dolphin Mini) starting at $20,100 (99,800 reals) in Brazil as it gets closer to the US (it already sells electric buses here). According to BYD Mexico head Zhou Zou, BYD is considering building a plant in the nation as it looks to set up an export hub to the US.

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BYD Seagull (: BYD)

Marin Gjaja, COO at Ford’s Model e EV unit, called Chinese EVs a “colossal strategic threat” during a panel discussion Wednesday.

Gjaja said Ford better “get going on EVs, or we don’t have a future as a company.” He added, “They are ahead of us in this technology.”

City Dwellers’s Take

Despite the urgency in Ford’s recent comments, the automaker is still cutting EV production here in the US while pushing back major EV initiatives.

Ford’s CFO John Lawler confirmed the company is delaying around $12 billion in EV spending last year. Last month, Ford said it was cutting F-150 Lightning production, citing “slower than expected” demand. This was the second production cut in less than five months.

Ford said the move was to “achieve the optimal balance of production, sales growth and profitability.”

Lawler explained Ford is “changing the pace and flow” of capital and EV capacity, including scaling back production plans at its Marshall plant by about half.

Meanwhile, overseas rivals like Volvo are already a step ahead with new EVs like the EX30, starting at $35,000 rolling out.

: Reuters, Bloomberg, DetroitFreePress

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