Ford plans to start rolling out its new family of affordable electric vehicles in 2027, including a midsize pickup truck with a target starting price of $30,000 (R532,446), the company said on Monday as it aspires to the cost efficiency of Chinese rivals.
The new midsize four-door pickup will be assembled at the carmaker's Louisville, Kentucky, plant. Ford is investing nearly $2bn (R35.49bn) in the plant, which produces the Escape and Lincoln Corsair, retaining at least 2,200 jobs, it said.
Chinese carmakers such as BYD have streamlined their supply chain and production system to produce EVs at a fraction of the cost of Western carmakers. While the vehicles have yet to enter the US market, Ford CEO Jim Farley said they set a new standard that companies such as Ford must match.
"I can't tell you with 100% certainty this will all go right," Farley told a crowd at Ford's Louisville assembly plant on Monday, noting past efforts by US carmakers to build affordable cars had fizzled. "It is a bet. There is risk."
Ford has been developing its affordable EVs through its skunkworks team filled with talent from EV rivals Tesla and Rivian. The California-based group, led by former Tesla executive Alan Clarke, has set itself so much apart from the larger Ford enterprise that Farley said even his badge could not get him into its building for some time.
EVs sold for an average of about $47,000 (R834,545) in June, JD Power data showed. Many Chinese models sell for $10,000 (R177,562) to $25,000 (R443,907). Affordability is a top concern for EV shoppers, auto executives have said, and the global competition for delivering cheaper electric models is heating up.
EV startup Slate, backed by Amazon CEO Jeff Bezos, is aiming for a starting price in the mid-$20,000s (R355,000) for its electric pickup.
Tesla has teased a cheaper model, with production ramping up later this year.
Rivian and Lucid are also planning to roll out lower-priced models for their lineups, though price points are in the $40,000s (R710,251) to $50,000s (R887,710).
Since rolling out plans earlier this decade to push hard into EVs, Ford has pulled back as the losses piled up. It has scaled back many of its EV goals, canceled an electric three-row SUV and axed a programme to develop a more advanced electrical architecture for future models.
Ford last year announced it would start building its midsize truck from the skunkworks team in 2027.
The carmaker earlier this year estimated losing up to $5.5bn (R97.65bn) on its EV and software division. It lost nearly $10bn (R177.56bn) combined on the operations from 2023 to 2024.
Cutting costs on battery-powered models has been one of the primary goals of Farley, who has said he expects the new family of EVs to be profitable within one year. Ford sells three EVs in the US:
- the Mustang Mach-E SUV;
- E-Transit van; and
- F-150 Lightning pickup.
Sales of the vehicles fell 12% in the first half from the year-ago period. Meanwhile, interest in hybrids has surged, with sales up 27% over the same window. Ford recently pushed back production of its next-generation F-150 Lightning and E-Transit to 2028.
The elimination of a $7,500 (R133,166) consumer tax credit, loosening regulations on emissions and reduced funding for charging infrastructure are expected to further dampen demand.
All this makes it more important for carmakers to pick their lanes, Farley has said.
"The pure EV market in the US seems to us very clear: small vehicles used for commuting and around town," Farley told analysts on an earnings call last month.
By contrast, crosstown rival General Motors has electrified vehicles across its entire lineup, from the hulking Hummer to the smaller Equinox SUV. GM spent more time upfront building a ground-up platform as a base for its EV models.
Meanwhile, Ford has reconfigured many of its popular combustion-powered vehicles with batteries to get to market sooner, delaying the development and launch of a unified EV platform, details of which it unveiled on Monday.
While being out front has exposed Ford to more EV demand fluctuations over the past two years, it has also learned more about the market, Farley has said. Ford is using lithium-iron-phosphate, or LFP batteries, for the forthcoming family of EVs. The batteries are produced in Marshall, Michigan, using technology from Chinese EV-battery maker CATL that has helped to bring down the sticker price of electric cars.
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