Ford is looking for smaller, lower-cost electric vehicles to compete with the $25,000 Tesla in China

Is Ford shifting its electric vehicle efforts away from large EVs like this? F-150 Lightningand focus on carrying the Model T ethos into the EV era?

At first glance, Ford CEO Jim Farley’s comments on Tuesday suggest that this may be the case. During the company’s fourth-quarter 2023 earnings results, Farley and top executives summarized that the automaker plans to delay the launch date of some of its 2nd generation electric vehicles while placing more emphasis on the cost and efficiency of its electric vehicles – as it has done several times mentioned, a “new market reality”.

The company said it is also reassessing vertical integration and battery supply and “pursuing new chemistries and capabilities.”

Ford EV plans for Europe

Fewer large Ford electric vehicles, focus on smaller products

Farley noted that Ford will spend less capital on larger electric vehicles, with fewer of them, focusing on “regions and product segments where we have a dominant advantage, such as trucks and vans.”

He then added a layer of detail that could be interpreted in different ways.

“This is important because we quietly made a bet two years ago and assembled a super-talented skunkworks team to create a low-cost EV platform,” Farley said. “It was a small group, a small team, some of the best EV engineers in the world. And it was separate from the Ford mothership; It was a startup.”

“And they’ve developed a flexible platform that not only works across multiple vehicle types, but also provides a large install base for the software and services we’re now seeing with Pro,” Farley added.

Ford CEO Jim Farley

Top secret, or what was the Model E all about?

Although Farley may be talking about a new, secret platform, it is most likely the same platform that Ford clearly outlined almost two years ago. In May 2022, Ford announced it would launch the Model E as a standalone company that will “accelerate innovation and deployment of groundbreaking electric vehicles at scale, and develop software and connected vehicle technologies and services across Ford.”

“The Model Sheet approach is designed to develop, launch and scale breakthrough, high-volume electric and connected products and services for retail, commercial and shared mobility.”

Mid-Decade Ford EV Platforms presented by Hau Thai-Tang

While Farley reiterates that the Model E serves its purpose, it may be that there has been an even greater focus on affordability since 2022, when electric vehicles were in short supply and sold at dealer-imposed premiums, long before a Tesla was earmarked $25,000 for production in Texaspossibly next year.

None of the Wall Street analysts asked for clarification on the matter on Tuesday’s conference call.

“All of our EV teams are ruthlessly focused on the cost and efficiency of our EV products because the ultimate competition will be the affordable Tesla Chinese OEMs“Farley summarized.

Looking at the numbers, Ford said at the time of the Model E’s inception that it was targeting annual production of 2 million electric vehicles by 2026. To achieve that goal, or even close to its current trajectory, Ford would need a much cheaper, mass-market electric vehicle. The automaker said it sold 71,808 electric vehicles in 2023. Another higher volume model is his European Ford Explorer EVis coming next year and Farley expects further EV sales for Ford Pro and in Europe this year.

2025 Ford 3-row SUV –

“Groundbreaking efficiency” for 2nd generation electric vehicles

That being said, Farley has touted the strength of its upcoming Gen 2 products, which the automaker previously confirmed will include and be referred to as a full-size electric pickup truck codenamed T3 Millennium Falcon among the trucksand a three-row electric SUV expected in 2025 with a range of 350 miles from a 100 kWh battery.

“Our next Gen 2 products will be profitable in the first 12 months of launch,” the CEO announced.

“And these products will have breakthrough efficiencies compared to our Gen 1 products,” Farley added. “And they will be full of innovations that customers will be happy to pay for.”