Dive Brief
- Ford Motor Co. created a small elite team to develop a low-cost electric vehicle platform, CEO Jim Farley revealed during the company’s Q4 earnings call on Tuesday.
- Farley said the new platform should allow Ford to produce and sell EVs that are more affordable than those currently on the market.
- Ford now plans to launch multiple EVs that use its forthcoming low-cost EV platform. The technology will be a key part of the automaker’s revamped electrification strategy, Farley said.
Dive Insight:
Automakers, including Tesla, are rushing to develop less expensive EVs to address concerns that costly battery-powered cars and trucks hinder consumer adoption.
“As the COVID shock retreated, we learned that as you scale EVs to 5,000 to 7,000 units a month and you move into the early majority customer, they are not willing to pay a significant premium for EVs,” Farley said. “This is a huge moment for us.”
Ford created the elite “skunkworks” team, which operates separately from the “Ford mothership,” two years ago to safeguard the company from lower-cost competition from other automakers, Farley said. The new EVs should be profitable within 12 months of launching.
“All of our EV teams are ruthlessly focused on cost and efficiency in our EV products because the ultimate competition is going to be the affordable Tesla and the Chinese OEMs,” Farley said.
The automaker also revised its electrification strategy to meet rapidly changing market demands and make its EV business unit, Model e, profitable, Farley said. Ford plans to sell more hybrids in the near term while focusing more on small EVs and less on large ones.
He added that the company is also adjusting its battery capacity to match demand, investing in new battery technologies and revisiting its approach to vertical integration.
“We have to have this electrification business stand on its own. That’s our goal,” Farley said.
