Affordable EVs from Tesla and Chinese automakers are the target of Ford's new secret project, according to the CEO.
Affordable EVs from Tesla and Chinese automakers are the target of Ford's new secret project, according to the CEO.sheds a few more details on what we’ve already reported about Ford’s push to produce cheaper EVs as a bulwark against the threat of low-priced Chinese EV imports. While we already knew that Ford was building a small team in Irvine, California, headed by Alan Clarke ,The report also adds some detail to what might emerge from the roughly 100-person team in Irvine.
This new platform will also serve as a "large install base for software and services," meaning Ford is expecting to augment lower vehicle costs with additional revenue from subscription services such as Blue Cruise hands-free highway driving assist which is proving popular and profitable already. Ford Pro, the commercial vehicle division, is a $60 billion high-margin business, in part because customers are willing to pay for software services and it represents recurring revenue.
Farley sees Tesla and Chinese automakers as the biggest competition for a couple reasons: the strength of their EVs, and the ability to make a profit on them even at lower price points.that CEO Elon Musk says will cost less to build and thus yield more affordable vehicles, but the new Teslas are unlikely to appear for a few years.Until now, Ford had been only talking about its work on second-generation EVs, which start rolling out in 2026, and are being developed with a lower cost structure.
The Ford team sees continued growth in demand for EVs, anecdotes from dealers and rental companies aside. But affordability is key. As is profitability. The $4.3 billion in net income in 2023 was courtesy of Ford Pro and the mainstream Ford Blue division that sells vehicles with internal combustion engines, including hybrids. Ford e, which is the EV division, lost $4.7 billion last year.
Farley said hybrid sales were up 20 percent in 2023 and will increase 40 percent this year. Capacity was planned, years ago, to support this forecast, unlikeEric Tingwall | Oct 20, 2023
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