For the last two years, a small “skunkworks” at the Ford Motor Company has been working on a low-cost electric vehicle platform, according to Ford CEO Jim Farley. Farley revealed the existence of this new platform during the automaker’s quarterly financial results call with investors on Tuesday evening. The company is rethinking its electrification strategy, having now faced up to the reality that the current crop of EVs are too expensive for mass-market adoption to take off.
Ford was early to market with its Mustang Mach-E crossover, itself the product of a skunkworks-style development process: an internal group called Team Edison, formed to add some excitement to what was originally going to be a more boring compliance car. The team also took the bold step of making a fully electric version of the country’s bestselling vehicle, the F-150 pickup truck.
Demand for the electric F-150 Lightning appeared strong, but a series of price hikes has resulted in really expensive trucks languishing on dealer forecourts and Ford cutting production shifts to reduce output. The Mustang Mach-E is still selling, although with barely any growth year on year.
Ford also split its EV activities into a separate division, called Model e, which exposes just how much money this is all costing—a loss of $4.7 billion. That’s quite a lot more than the $3 billion it thought Model e would lose in 2023.
Farley said the company will develop smaller and cheaper EVs, although he did not announce any specific new models by name. “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,” he said.
“We made a bet in silence two years ago,” Farley said of Ford’s newest skunkworks. “They’ve developed a flexible platform that will not only deploy to several types of vehicles but will be a large install base for software and services,” he told investors.
Ford may scale back some of its battery factory ambitions, too. “One of the things we’re taking advantage of in taking some timing delays is rationalizing the level and timing of our battery capacity to match demand and actually reassessing the vertical integration that we’re relying on, and betting on new chemistries and capacities,” Farley said.
In 2023, Ford announced and then canceled a $3.5 billion plant to manufacture lithium iron phosphate battery packs in Michigan. But there are also three lithium-ion factories in the works in Kentucky and Tennessee.
Ford no longer expects Model e to be profitable by 2026, but Ford CFO John Lawler said that Model e would need to stop losing money “sooner or later.”
“EVs are here to stay, customer adoption is growing, and their long-term upside is central to Ford+,” said Lawler. “The customer insights we’re getting by being an early mover in electric pickups, SUVs, and commercial vehicles are invaluable—especially as we’re developing next-generation EVs that are going to surprise customers and be profitable within a year of launch.”
We badly need a ten thousand dollar car in the US. The price of a new automobile has gotten batshit insane and I look enviously overseas to places that can get cheap, modern Chinese EVs.
American automakers are doing the country a disservice by not following suit.
Or, dammit, let me buy a fucking Chinese car.
We are never going to see a brand new $10k EV.
It’s time to be realistic.
-
We haven’t had new vehicles for $10k in almost (over?) 20 years
-
I can guarantee there will be even more tariffs on low cost imports because the auto manufacturers and auto unions aren’t going to let that segment of American manufacturing vanish.
They are cheaper than that in China right now. $7000 USD for a new electric car over there.
It doesn’t matter what they’re priced at overseas.
There is zero political incentive to vaporize the auto industry by allowing it.
The Democrats likely can’t because they’d lose UAW support in multiple swing states.
The Republicans can’t because they can either try to use this to gain support from auto union members and/or vocally use this for increased tariffs.
And I’d wager that neither wants to be in charge if the auto industry goes on a decline.
You can barely find a good used ICE car for $10,000, so I don’t think that’s ever gonna happen.
But one of my many myriad problems with the current crop of EVs is that they won’t be under $10,000 on the used market in large numbers for a long time, since they’re starting at $30,000 and way, way up.
If we want to electrify the fleet of American cars - which also has many myriad problems - we need for normal folks to be able to buy and use them.
Even when you can buy them, they will need the battery replaced, which could be too expensive to buy anyway.
Overall demand in the US is still towards larger vehicles. Until we see a shift in that, we’re not going to get small vehicle focused demand, especially in a smaller sector like EVs currently are.
I think part of that can be attributed to the same thing as the demand for single family suburban homes though: the lack of availability of anything else.
My mom just replaced her almost 10 year old Highlander with a RAV-4, which is basically the same thing but smaller. Except, her new RAV-4 is the same size as her Highlander was, and the newer Highlanders are even bigger than that.
You aren’t gonna get one with union labor in the u.s. and even if it was made by non union labor either the workers would be horribly underpaid and/or the quality would be lower.
It’s not right to compare prices between countries with vastly different price levels. Are u.s. farmers doing the country a disservice by not selling pork for $0.50 a pound? No we accept that we make more and that we should pay our fellow Americans more so they can have the same quality of life we do. Ideally this solidarity should extend internationally but we should at least preserve it in the U.S.
China needs a $10,000 vehicle because that’s all there middle class making $20,000 can afford. The u.s. doesn’t, plenty of middle class Americans are buying new $30,000 cars, they just aren’t buying electric ones, they’re getting huge SUVs and pickup trucks. What the u.s. needs is to disincentivize or even ban people from buying large gas cars that don’t need them.
Eventually if everyone’s forced to get evs the used stock will turn into evs too and you’ll get your $10,000 ev without destroying the American auto industry and millions of good paying union jobs.
ban people from buying large gas cars that don’t need them.
That’s going to be a fun time deciding who does and doesn’t need them. And deciding who decides that. Ill skip that jury duty please
It wouldn’t be too hard if you take it from the starting point of you need to prove that you need it, and that could basically just be answering the following questions
- do you need it for your job, is it on this list of jobs that require a large vehicle?
- do you have a disability that requires a large car?
Maybe add in another exception for large families but station wagons filled that niche fine before SUVs came in. Either way these are very discrete and definable definitions.
We even already have the framework set up, semi trucks require different licensing and registration so that some random person can’t just buy a vehicle that can easily kill a ton of people accidentally. The way trucks are headed that argument continues to get more applicable.
If anyone could sell a $20k EV, with +200mile rage, in the US, that would be a pretty big accomplishment. So far the Bolt can allegedly be had for $27k, before dealer bullshit.
I was so disappointed when Smart Car pulled out of North America. Those cars were so great for city living, nothing as compact available in the US now.
I never got those cars. The only use case I could see was what you described: high density downtown living. They are small but that’s it. They were not cheap. They were not efficient. They were not convenient in any way other than the footprint. And if you are living and driving in a downtown area where the small size is a benefit, there is a good chance walking or other public transit options are more available anyway.
They just seemed way too niche.
A golf cart would be more economical and useful.
Also I think uber/lyft kinda killed the need for a city car for most people. Why buy a small useless car that you use maybe once a week for a butt ton of money. When you can pay $20 to drive to the other side of town? The savings on parking alone probably make it a better value.
I used to live in a city where a Smart Car made a lot of sense. It was a dense, walkable neighborhood with a lot of amenities, but there were things outside the city that I couldn’t get to by public transit. For those times I needed a car, but I’d often not move it for a week except to avoid a fine on street cleaning day.
Mine was a Scion xA, which was almost as tiny. And for commuting I had a scooter.
I once saw 3 people trying to fit into one of the convertible versions in a McDonalds parking lot. The ‘back seat’ passenger was trying to climb in through the open roof. I wish I would have stuck around longer to see how it turned out.
They’re completely fine for travel. I’ve taken one on the interstate numerous times. The owner, a driver known for not being great at driving, took it coast to coast (US). It’s the downtown-parking car that takes you off the transit routes. It’s the city car for the other 90% of the cities that aren’t optimized for carless life and for people who travel to the suburbs and beyond. I considered one myself for a poor suburban parking situation. I ended up with a miata-length suzuki sidekick for the 4x4 snow fantasy and mildly better cargo situation without taking a big hit in fuel economy. It fares fine on the interstate too with all 90 screaming horses (and a little attention to wind)
The Smart Car wasn’t a very good car though. Its engine was underpowered for how small it was, poor fuel economy, yet still required premium fuel. The transmission shifted like a teenager playing Grand Turismo on PS1 for the first time. The car also wasn’t inexpensive.
The ONLY thing the Smart Car had over competitors was its small size, and for just a tiny bit bigger you could get a Prius C which fixed every single one of the Smart Car problems and even let you haul more than 1 bag of groceries.
Cheaper electric cars would be great. But there are some elephants in the room. At least in the UK, insurance premiums are rising fast for EVs , due to expensive parts and long repair times. And they were already higher than ICV insurance due to higher list price and more powerful drivetrains. The charging network is growing very slowly and public fast chargers tend to be expensive. I haven’t done the maths, but I am not convinced the total cost of ownership works out well for EVs.
Be nice if the powerboost or the lightning was a PHEV.
