Ford CEO Jim Farley announced at the Aspen Ideas Festival on Friday that Ford plans to launch a $30,000 electric vehicle (EV) that will be profitable within approximately two and a half years. Farley did not disclose many other details about the vehicle, which is being developed by Ford’s “Skunk Works” team, but said that its main competitors are expected to be Chinese automakers like BYD and American EV leader Tesla in the entry-level EV segment. Farley stated that Ford will initially focus on smaller EVs rather than larger fully electric trucks and SUVs, which have historically been the company’s profit engines powered by gasoline, because those vehicles “never make money.” “As an (automaker), you have to make a fundamental change to make money on EVs. The first thing we have to do is really put all of our capital into smaller, more affordable electric vehicles,” Farley said in an interview with CNBC’s Julia Boorstin. “That’s the real match that we’re discovering right now. Those huge, huge, huge electric vehicles never make money. A $50,000 battery… those batteries are never going to afford.” A Ford spokesperson later clarified that Farley was referring to large vehicles like the company’s Super Duty models or vehicles that require a large battery pack to achieve a 500-mile electric range, not Ford’s current fully electric F-150 Lightning pickup or the next generation of EVs. Ford had previously announced earlier this year that it would delay production of a large three-row SUV at a Canadian plant from its preliminary plan of 2025 to 2027. It also pushed back the next generation of its pickup, codenamed “T3,” from late 2025 to 2026. Farley reiterated on Friday that Ford’s next generation of vehicles will be profitable. He also stated that Americans need to “fall in love” with smaller cars instead of larger vehicles, which is a surprising statement considering that Ford derives most of its profits from trucks and given that U.S. automakers have historically struggled to make money on small cars. “We have to start falling in love with small cars again. It’s important for our society and it’s important for the adoption of electric vehicles,” Farley said. “We just fell in love with these monster vehicles, and I love them too, but it’s a weight issue.” In the first quarter of this year, Ford’s electric vehicle division reported a loss of $1.32 billion due to the wholesale of 10,000 vehicles. While the division also includes EV-related businesses such as software, these losses equate to $132,000 lost per vehicle sold by the division. Farley stated that it is crucial for Ford to produce profitable electric vehicles in the next five years as Chinese automakers continue to expand globally. He said, “If we don’t make money on EVs and we have a competitor that has the biggest market in the world, that’s already dominant globally, that has already built supply chains all over the world… what’s our future in five years? We’re going to shrink to North America.”
