Ford is placing a bet on smaller, electric vehicles as its long-term strategy. The Skunk Works team’s modest size belies its significant impact, and with the cat now out of the bag, our focus shifts to Ford’s innovative affordable platform. Ford CEO Jim Farley contrasts his company’s new low-cost electric vehicle (EV) platform with those of Rivian and Tesla. Nonetheless, Chris Farley could have prompted Ford’s to increase their prices while still being more affordable.
Ford’s Farley disclosed to financial analysts and investors during an earnings call in February that the company is developing a low-cost electric vehicle (EV) platform for its future electric models, earmarked for the Skunkworks team.
While comprising a compact team, Farley assuredly stated that it comprised “numerous top-tier EV engineers from this planet.” Led by Alan Clarke, an expert renowned for his collaborations on Tesla’s Model Y.
In recent months, Ford has bolstered its ranks by recruiting around 50 former Rivian employees, as well as individuals from other prominent electric vehicle companies like Tesla (over 20), Lucid (another 20), and even tech giant Apple, with several new hires coming on board. Ford has further leveraged its partnership with eVTOL pioneers such as Archer Aviation, Joby, and Hyundai’s Supernal to tap into their collective expertise in the emerging field of electric vertical takeoff and landing aircraft.
Farley explained earlier this year that the team is crafting an entirely new approach, a unique offering at a distinct price point, featuring a significantly smaller battery and innovative chemistry.
Ford has confirmed that its new platform will underpin multiple models across various segments. During this week’s discussion of Ford’s Q2 earnings, Farley provided valuable insights into what we can expect.
The electric vehicle (EV) market has witnessed an incredible surge in recent years, driven by the growing demand for sustainable transportation and decreasing battery costs. Ford Motor Company has been working diligently to keep pace with this trend, and now it’s announced a new low-cost EV platform that bears striking similarities to Rivian and Tesla.
Ford is keen to tap into the market’s potential, leveraging its vast manufacturing capabilities to produce high-quality vehicles at affordable prices.
Although Ford’s electrification journey has been a humbling experience, CEO Jim Farley is satisfied that the company started this process 2.5 years ago, as it now has the opportunity to apply the lessons learned to significantly improve its future electric vehicles.
Ford, along with Rivian and Tesla, is “one of the few OEMs outside of China that control software across the entire vehicle ecosystem,” Farley said on Wednesday.
While many focus on over-the-air updates for cars in leisure mode, Farley clarified that Ford now possesses extensive multi-year experience in upgrading powertrains, effectively revolutionizing the fundamental efficiency of connected vehicles.
The complexity of Ford’s customer base increases exponentially due to its diverse product lineup, which includes the F-150 and Professional series, making it inherently more challenging to cater to clients compared to electric vehicle manufacturers like Rivian and Tesla.
According to Farley, Ford is ahead of Rivian, Tesla, and other original equipment manufacturers (OEMs) because it has more challenging platforms, thereby allowing the company to have greater scale as a result.
“With a focus on innovation, they’ve developed cutting-edge electric vehicle components that not only meet but exceed expectations in terms of quality and affordability, according to Farley.”
With Ford’s BlueCruise technology, more than 415,000 vehicles have been equipped to navigate highways while providing hands-free driving capabilities. The company has seen a significant increase of 25% in that metric since the first quarter.
Chinese electric vehicle (EV) manufacturers are poised to challenge Tesla’s dominance in the global market by offering more affordable options.
Despite this, Farley clarified that “the second key challenge is aligning the pricing of our Chinese OEM partners and Tesla, primarily for affordable EVs.” He noted that Ford is developing a “transformative eco-friendly platform, harnessing innovation across our product development, supply chain, and manufacturing teams.”
Ford will refocus its efforts on two distinct areas: Work Solutions and Joy of Driving, emphasizing its commitment to meeting customers’ evolving needs in both their professional and personal lives. Affordable mini cars require less battery power, leading to reduced costs and increased profitability.
Farley emphasized that Tesla is further amplifying the significant cost advantages EVs have already achieved.
Ford will capitalise on the platform across numerous high-profile opportunities, according to Farley’s statement. This strategic move could potentially drive growth and expand the company’s software development enterprise.
As vehicles increasingly transform into highly advanced computing platforms, Ford is designing “personalized, interconnected, and continually refined experiences” that seamlessly integrate automotive functionality with cutting-edge technology.
With out China’s assist?
Ford’s CEO, Jim Farley, responded to Morgan Stanley analyst Adam Jones’ inquiry about whether the company could develop and bring a low-cost electric vehicle (EV) to market without relying on China for support by mentioning that Ford took a bet on Contemporary Amperex Technology Co. Limited (CATL) a few years ago.
Ford to locally produce lithium-iron-phosphate (LFP) battery cells in Michigan, partnering with Contemporary Amperex Technology Limited (CATL). Ford’s CEO clarified that their partnership with XPeng shouldn’t involve adopting Volkswagen’s approach, while stating their own strategy will be to focus intensely on the supply chain for intellectual property.
Farley predicted that the true test of electric vehicle (EV) profitability would likely come from small cars. He also believed that many of their competitors would turn to either independent Chinese companies or partners to primarily utilize their platforms globally.
Ford’s Mannequin e EV venture suffered another significant loss, this time to the tune of $1.1 billion in the second quarter. Ford reportedly suffered a significant financial setback in the first half of 2024, losing an estimated $2.5 billion on its electric vehicle (EV) investments. The automaker is pinning its hopes on a new low-cost electric vehicle (EV) platform to turn things around.
