Ford CEO says a profitable $30,000 EV is coming in two and a half years

June 29, 2024 by admin 44 Comments

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An electric Ford truck is displayed during the Electrify Expo D.C. in Washington, D.C., on July 23, 2023.

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Ford Motor expects to introduce a $30,000 all-electric vehicle that will be profitable in roughly 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 anticipated entry-level car from U.S. EV leader Tesla.

Farley said Ford is first focusing on smaller EVs 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 an [automaker] to get to a profitable EV. The first thing we have to do is really put all of our capital toward smaller, more affordable EVs,” Farley said during an interview with CNBC’s Julia Boorstin. “That’s the duty cycle that we’ve now found that really matches. These big, huge, enormous EVs, they’re never going to make money. The battery is $50,000. … The batteries will never be affordable.”

A Ford spokesman later clarified Farley was referring to large vehicles such as the company’s Super Duty models or vehicles that require massive battery packs to achieve significant EV ranges of 500 miles. He was not referring to ones such as Ford’s current all-electric F-150 Lightning pickup or next-generation EVs.

Ford earlier this year said it was postponing production of a large three-row SUV at a plant in Canada to 2027 from its initial plan of 2025. It also postponed a next-generation pickup, codenamed “T3,” from late 2025 to 2026.

Farley on Friday reiterated Ford’s next-generation vehicles would be profitable.

He also said Americans need to “get back in love” with small cars instead of larger ones, a surprising statement given a majority or Ford’s profits come from trucks and considering American carmakers have historically had trouble making money on small models.

“We have to start to get back in love with smaller vehicles. It’s super important for our society and for EV adoption,” Farley said Friday. “We are just in love with these monster vehicles, and I love them too, but it’s a major issue with weight.”

Ford’s EV unit lost $1.32 billion during the first quarter of this year on 10,000 vehicles wholesaled. While the unit also includes EV-related business such as software, those losses equate to a loss of $132,000 per vehicle the unit sells.

Farley said it is crucial for Ford to make profitable EVs in the next five years as Chinese automakers continue to expand globally.

“If we cannot make money on EVs, we have competitors who have the largest market in the world, who already dominate globally, already setting up their supply chain around the world,” he said. “And if we don’t make profitable EVs in the next five years, what is the future? We will just shrink into North America.”