Amid a flood of new competition, Ford is shifting plans to build more affordable electric vehicles. Ford is developing a new low-cost EV platform to power a small electric pickup and SUV, with starting prices around $25,000. However, due to the pivot, plans for its three-row electric SUV have been put on the back burner.
Shifting to low-cost EVs
Although low-cost Chinese passenger EVs, like BYD, are not sold in the US, they are having a big impact on domestic automakers.
Ford’s CEO Jim Farley reiterated his concerns over the low-cost overseas rivals during a Wolfe Research conference last month. Farley explained that if you cannot compete with Chinese automakers, “20% to 30% of your revenue is at risk.”
“As the CEO of a company that had trouble competing with the Japanese and the South Koreans, we have to fix this problem,” Farley said.
Ford learned “pretty quickly to bet on a smaller EV platform.” The American automaker’s leader admitted larger EVs, like the F-150 Lightning, are expensive to build.
Farley said anything “larger than the Escape” better be functional or a work vehicle. Meanwhile, smaller electric cars are different. An Escape-sized EV or smaller “completely works,” Ford’s leader explained.
Not only does it work, but “It’s dramatically better operating cost than a (Toyota) Corolla or a (Honda) Civic or even a (Ford) Maverick.”
Ford plans smaller affordable EV pickup and SUV
During an investor call last month, Farley revealed the company had been “secretly” working on a low-cost EV platform.
Ford put together a “super-talented skunk works team” to create it with “some of the best EV engineers in the world.” The team is led by Alan Clarke, who led the engineering on Tesla’s best-selling Model Y.
According to Bloomberg Businessweek, the team (less than 100 people) is developing a new affordable EV platform to power a new small, more affordable Ford electric pickup and SUV.
Sources familiar with the matter say the first model will launch in 2026, with starting prices around $25,000. It will rival the low-cost EV Tesla is working on.
The platform will first feature LFP batteries, which are about 30% cheaper than traditional lithium-ion. However, it’s also exploring other EV battery tech.
Amid the shift, Ford is delaying plans for a larger three-row electric, according to the sources.
Ford’s move comes as several automakers aim to take on low-cost EVs from China. After topping Tesla in the last three months of 2023 to become the largest global EV maker, BYD is upping the competition this year.
The Chinese automaker declared a “liberation battle” on gas-powered vehicles after launching a series of low-cost electric vehicles.
Its cheapest, the new Seagull, starts at around $9,700 in China. Farley called BYD’s Seagull “pretty damn good,” as he warned other automakers.
Although BYD currently has no plans to sell passenger EVs in the US, it is “just getting started” in other markets like Europe. BYD’s first cargo transport ship, carrying 3,000 vehicles, landed in Germany last month as it expands overseas.
Ford is not the only one watching. Stellantis CEO Carlos Tavares told reporters last month, “The Chinese offensive is possibly the biggest risk that companies like Tesla and ourselves are facing right now.”