Farley Says Inexpensive Ford EV ‘Not Negotiable’

Ford CEO Jim Farley has long touted the fact that high pricing remains one of the biggest obstacles standing in the way of more widespread EV adoption, as all-electric vehicles tend to cost considerably more than their ICE counterparts due to higher materials costs. This is precisely why the automaker has switched its strategy to focus on smaller, cheaper Ford EV models, and it has also been secretly working on a new, low-cost electric vehicle for a couple of years now with a skunkworks team led by former Tesla exec Alan Clarke. As it turns out, Farley is quite serious about making such a machine come to fruition as well, as he discussed during the automaker’s recent Q4 2023 earnings call with investors.

“But it’s not reality anymore. What reality is, is I have to run the company by saying to my team, it’s not negotiable that we’re going to allocate capital to a new affordable electric vehicle with this skunkworks team or whatever, and you have to make money in the first 12 months,” Farley said. “And I don’t want a bullsh*t roadmap. I want like a real plan. And if you can’t be in that plan, we ain’t launching the car. And the backup plan to that is a little bit scary because of compliance, because we have a really profitable company now. Everywhere we make money, except for Model e.”

Indeed, Ford’s all-electric Model e unit has thus far proven to be a bit of a profit drain for FoMoCo, which is otherwise enjoying big margins coming from its Ford Pro commercial and Ford Blue ICE business units. This is precisely why Ford chose to switch up its EV strategy, focusing on lower-cost models that consumers are pining for, and ones that can also generate profits within a reasonable timeframe.

At the moment, it’s unclear what this new low-cost Ford EV might look like, but as Ford Authority recently reported, Farley has hinted that it could take inspiration from the existing Ford Escape. Regardless, its presence is extra-important to Ford as the looming possibility of cheap Chinese EVs invading American soil has recently become a rather large threat to the automaker and its rivals.

We’ll have more on Ford’s EV strategy soon, so be sure and subscribe to Ford Authority for continuous Ford news coverage.