A Ford electric truck is displayed during the Electrify Expo DC in Washington, DC on July 23, 2023.
Nathan Howard | Getty Images
Ford Motor expects to introduce a $30,000 all-electric vehicle that will be profitable in about two and a half years, CEO Jim Farley said Friday during the Aspen Ideas Festival.
Farley did not release many other details about the vehicle, which is being developed by a Ford “skunkworks” team, but said its main competitors are expected to be Chinese automakers such as BYD and an expected entry-level car from the leader of the US Tesla.
Farley said Ford is focusing on smaller EVs first instead of larger all-electric trucks and SUVs, which have historically been gas-powered profit engines for the company, because such vehicles “are never going to make money.”
“You have to make a radical change as [automaker] to reach a profitable EV. The first thing we need to do is really put all of our capital into smaller, more affordable electric vehicles,” Farley said during an interview with CNBC’s Julia Borstyn. “That’s the work cycle we’ve now found to really fit. These big, huge, huge EVs, they’re never going to make any money. The battery is $50,000. … Batteries will never be affordable.”
A Ford spokesman later clarified that Farley was referring to large vehicles like the company’s Super Duty models, or vehicles that require massive battery packs to achieve substantial EV ranges of 500 miles. He wasn’t referring to the likes of Ford’s current all-electric F-150 Lightning pickup or next-generation EVs.
Ford earlier this year said it pushed back production of a large three-row SUV at a plant in Canada to 2027 from its original plan of 2025. It also pushed back a next-generation pickup, codenamed “T3,” from late 2025 in 2026.
Farley reiterated Friday that Ford’s next-generation vehicles will be profitable.
He also said that Americans need to “fall back in love” with small cars instead of bigger ones, a surprising statement given the majority or Ford’s profits come from trucks and considering that American automakers have historically had trouble making money from small models.
“We need to start falling in love with smaller vehicles again. It’s extremely important for our society and for the adoption of electric vehicles,” Farley said Friday. “We’re just in love with these monster vehicles, and I love them too, but it’s a major weight issue.”
Ford’s EV unit lost $1.32 billion in the first quarter of this year on 10,000 wholesale vehicles. While the unit also includes EV-related activities such as software, those losses equate to a loss of $132,000 per vehicle sold by the unit.
Farley said it is vital for Ford to make profitable electric cars over the next five years as Chinese automakers continue to expand globally.
“If we can’t make money from electric vehicles, we have competitors who have the biggest market in the world, who are already dominating globally, already building their supply chain around the world,” he said. “And if we don’t build profitable EVs in the next five years, what’s the future? We’re just going to shrink in North America.”
