Ford's new line of affordable EVs to start at about $30,000
The new midsize four-door pickup will be assembled at the automaker's Louisville, Kentucky, plant. Ford (F.N), opens new tab is investing nearly $2 billion in the plant, which produces the Escape and Lincoln Corsair, retaining at least 2,200 jobs, it said in a statement.
Chinese carmakers such as BYD (002594.SZ), opens new tab have streamlined their supply chain and production system to produce EVs at a fraction of the cost of Western automakers. While these vehicles have yet to enter the U.S. market, Ford CEO Jim Farley said they set a new standard that companies like Ford must match.
'We have all lived through far too many 'good college tries' by Detroit automakers to make affordable vehicles that ends up with idled plants, layoffs and uncertainty. So, this had to be a strong, sustainable and profitable business," Farley said in a release Monday.
Ford has been developing its affordable EVs through its so-called skunkworks team, filled with talent from EV rivals Tesla (TSLA.O), opens new tab and Rivian (RIVN.O), opens new tab. 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 in June, J.D. Power data showed. Many Chinese models sell for $10,000 to $25,000.
Affordability is a top concern among 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 for its electric pickup. Tesla has teased a cheaper model, with production ramping up later this year. Rivian and Lucid (LCID.O), opens new tab are also planning to roll out lower-priced models for their lineups, although price points are in the $40,000s to $50,000s.
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 program 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 automaker earlier this year estimated losing up to $5.5 billion on its EV and software division. It lost nearly $10 billion combined on those 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 this new family of EVs to be profitable within one year.
Ford sells three EVs in the U.S.: the Mustang Mach-E SUV, E-Transit van, and F-150 Lightning pickup. Sales of those 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 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 automakers to pick their lanes, Farley has said.
"The pure EV market in the U.S. 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 (GM.N), opens new tab 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 gasoline-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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