Show me the money! Ford targets Tesla Model 2, MG4 and BYD Dolphin with new small electric car line-up
Facing multi-billion dollar annual losses from its electric vehicle product roll-out, Ford has revealed it is going to build its own ground-up smaller and cheaper EVs to tackle the Tesla Model 2 and Chinese brands head-on.
As outlined by global boss Jim Farley, the new strategy is going to be based on a new EV platform that will deliver almost immediate profits.
So far in North America, Ford has invested in the electric F-150 Lightning and Mustang Mach-E based on adapted ICE platforms.
In Europe it has collaborated with Volkswagen, utilising the German giant’s MEB EV architecture for several upcoming models including the Explorer SUV and Capri crossover.
The new EV architecture is being developed by a small team that was put in place two years ago in secrecy. It is expected to underpin multiple vehicles.
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Speaking at an auto conference in New York sponsored by Wolfe Research, Farley explained the fundamental change.
“It’s non-negotiable that we’re going to allocate capital to a new affordable electric vehicle … and you have to make money in the first 12 months,” he said.
He even related the way he explained his thoughts to his executives at the blue oval: “I don’t want a bullshit road map. I want, like, a real plan. And if you can’t [execute] that plan, we ain’t launching the car.”
Farley said the change in strategy has come because smaller, cheaper cars make more sense to consumers. Whoda thunk it!
“What the customer has now said to us is, ‘if you have [an EV] larger than Escape, it better be really functional or a work vehicle’,” Farley said.
“But if you do the economics for a vehicle, let’s say the Escape or smaller, it’s totally different, it completely works. In fact, it’s dramatically better operating cost than a Corolla or Civic or even a Maverick.”
Farley specifically acknowledged that Ford needed cheaper EVs to go head-to-head with Chinese auto brands that dominate the entry-level end of the electric market. In Australia that charge is led by the MG4, BYD Dolphin and GWM Ora.
“If you cannot compete fair and square with the Chinese around the world, then 20 to 30 per cent of your revenue is at risk,” Farley said. “We have to fix this problem. We have to address this.”
Of course, as mentioned already, there’s the significant impact the entry-level Tesla Model 2 will make on the EV market when it arrives.
Ford has already forecast it expects to lose up to $US 5.5 billion ($8.4 billion approx) on EVs in 2024. In recent times it has delayed US$12 billion ($18.3 billion) in EV investments and cut production of the Lightning in half as EV demand slowed.
In Australia, Ford is off to a slow start with the Mustang Mach-E and even cut pricing before customer deliveries started late in 2023. VFACTS reported 51 were sold last year and 59 in January
