A Ford electric truck is on display during the Electrify Expo DC in Washington, D.C., on July 23, 2023.
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Ford Motor The company expects to offer 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 reveal many other details about the car, which is being developed by Ford's “skunkworks” team, but he said that its main competitors are expected to be Chinese automakers such as BYD And an anticipated entry-level car from the leading American EV company Tesla.
Ford is focusing first on smaller electric vehicles rather than all-electric trucks and larger SUVs, which were previously gas-powered profit engines for the company, because such vehicles “will never make money,” Farley said.
“You have to make a radical change as an (automaker) to get to a profitable electric vehicle,” Farley said during an interview with CNBC's Julia. “The first thing we have to do is put all of our capital into smaller, more affordable electric vehicles.” Burstein. “That's the business cycle that we're now finding really matches. These big, huge, massive electric cars, they're never going to make money. The battery is $50,000. … Batteries are never going to be affordable.”
Later, a Ford spokesperson clarified that Farley was referring to large vehicles like Super Duty models or vehicles that require massive battery packs to achieve a significant 500-mile electric range. He was not referring to vehicles like the current all-electric Ford F-150 Lightning truck or next-generation electric vehicles.
Ford said earlier this year that it would postpone production of a large three-row SUV at a factory in Canada to 2027 from its initial 2025 plan. It also postponed production of a next-generation pickup, codenamed “T3,” from late Year 2025 to 2026.
Farley confirmed Friday that Ford's next generation of vehicles will be profitable.
He also said that Americans need to “get back in love” with small cars rather than larger ones, a surprising statement given that the majority of Ford's profits come from trucks, and given that American automakers have historically had difficulty making money from small models.
“We have to start falling back in love with small cars. It’s so important to our society and to the adoption of electric vehicles,” Farley said Friday. “We love these giant vehicles, and I do, but it’s a big weight issue.”
Ford’s electric vehicle unit lost $1.32 billion in the first quarter of this year on 10,000 total vehicles sold. While the unit also includes EV-related businesses such as software, that loss equates to a loss of $132,000 for each vehicle the unit sells.
Farley said it is imperative for Ford to make profitable electric vehicles in the next five years as Chinese automakers continue to expand globally.
“If we can’t make money on electric vehicles, we’re going to have competitors who have the largest market in the world, who already dominate the world, who already have their supply chain all over the world,” he said. “If we can’t make profitable electric vehicles in the next five years, what’s the future? We’re going to be North American.”
