Ford Motor expects to launch a $30,000 all-electric vehicle that can be profitable in about two and a half years, CEO Jim Farley said Friday in the course of the Aspen Ideas Festival.
Farley didn’t provide further details concerning the vehicle, which is being developed by a Ford “skunkworks” team, but said its most important competitors are expected to be Chinese automakers, akin to BYD and a highly anticipated entry-level automobile from the US electric vehicle leader Tesla.
Farley said Ford is initially specializing in smaller electric vehicles reasonably than larger all-electric trucks and SUVs, which have historically been the corporate's gasoline-powered profit engines, because such vehicles “will never make money.”
“You need to make a radical change than [automaker] to get a profitable electric vehicle. The very first thing we want to do is admittedly put all of our capital into smaller, more cost-effective electric vehicles,” Farley said in an interview with CNBC's Julia Boorstin. “That's the work cycle that we've found now that actually suits. These big, huge, enormous electric vehicles are never going to earn a living. The battery costs $50,000. … The batteries are never going to be inexpensive.”
A Ford spokesperson later clarified that Farley meant large vehicles like the company's Super Duty models or vehicles that require huge battery packs to achieve significant EV ranges of 500 miles. He did not mean vehicles like Ford's current all-electric F-150 Lightning pickup or next-generation electric vehicles.
Ford announced earlier this year that production of a large SUV with three rows of seats at a plant in Canada would be postponed from the originally planned 2025 to 2027. Production of a next-generation pickup truck, codenamed “T3,” was also postponed from the end of 2025 to 2026.
Farley reiterated Friday that Ford's next-generation vehicles would be profitable.
He also said that Americans need to fall in love with small cars again, not larger ones. This statement is surprising considering that Ford makes most of its profits from trucks and that American automakers have struggled to make money from small cars in the past.
“We need to begin loving smaller vehicles again. That's hugely essential for our society and the adoption of electrical vehicles,” Farley said Friday. “We're just in love with these monster vehicles, and I really like them too, but weight is a giant issue.”
Ford's electric vehicle division lost $1.32 billion on 10,000 vehicles sold in the first quarter of this year. Although the division also includes electric vehicle-related businesses such as software, these losses equate to a loss of $132,000 per vehicle sold.
Farley said it was critical for Ford to produce profitable electric vehicles over the next five years as Chinese automakers continued to expand globally.
“If we are able to't earn a living in electric vehicles, we’ve competitors who’ve the biggest market on the earth, who already dominate globally and have already built their supply chains around the globe,” he said. “And if we don't make profitable electric vehicles in the subsequent five years, what does the long run appear to be? We'll just shrink to North America.”
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