Ford CEO Announces Launch of Profitable 30000 Electric Vehicle in Two and a Half Years

On July 23, 2023, an electric Ford truck was showcased at the Electify Expo D.C. in Washington D.C. The CEO of Ford, Jim Farley, announced at the Aspen Ideas Festival on Friday that Ford is expecting to launch a $30,000 electric vehicle that will achieve profitability within approximately two and a half years. Farley did not disclose many other details about the vehicle, which is being developed by Ford’s “Skunk Works” team, but mentioned that its main competitors are expected to be Chinese automakers like BYD and American electric vehicle leader Tesla in the entry-level car segment. Farley stated that Ford will initially focus on smaller electric vehicles rather than larger electric trucks and SUVs, which have historically been the company’s profit engine powered by gasoline, as these cars “will never make money.” In an interview with CNBC’s Julia Boorstin, Farley stated, “As an (automaker), you have to make fundamental changes to make an electric vehicle profitable. The first thing we have to do is really put all of our capital into smaller, more affordable electric vehicles.” “That’s the real match that we’re finding now. These huge, huge, huge electric cars will never make money. Batteries that cost $50,000…those batteries will never be affordable.” A Ford spokesperson later clarified that Farley was referring to large vehicles such as the company’s Super duty models or cars that require a large battery pack to achieve a 500-mile electric range. He was not referring to Ford’s current all-electric F-150 Lightning pickup or the next-generation electric vehicle. Earlier this year, Ford announced that it will delay the production of large three-row SUVs at a Canadian plant from the initial plan in 2025 to 2027. It also pushed back the launch of its next-generation pickup, codenamed “T3,” from late 2025 to 2026. Farley reiterated on Friday that Ford’s next-generation vehicles will be profitable. He also stated that Americans need to “fall in love again” with small cars rather than large ones, which is a surprising statement considering that Ford’s majority of profits come from trucks and given the historically challenging profitability of small cars for American automakers. Farley said, “We have to start falling in love with small cars again. It’s really important for our society and the adoption of electric vehicles.” “We just fell in love with these monster vehicles, and I love them too, but it’s a weight issue.” In the first quarter of this year, Ford’s electric vehicle division reported a loss of $1.32 billion due to wholesaling 10,000 vehicles. Although the division also includes electric vehicle-related businesses such as software, these losses equate to $132,000 per vehicle sold by the division. Farley stated that it is crucial for Ford to produce profitable electric vehicles in the next five years as Chinese automakers continue to expand globally. He said, “If we can’t make money on electric vehicles, we will have competitors that have the largest market in the world, dominate globally, and have established supply chains around the world.” “If we don’t produce profitable electric vehicles in the next five years, what does the future hold? We’ll just contract to North America.”