Though Ford currently offers a couple of large EVs – the F-150 Lightning and E-Transit – CEO Jim Farley has also made it quite clear that the automaker is reserving those types of vehicles for work-oriented purposes, or commercial customers, in general. Much of this decision stems from the fact that current battery technology simply isn’t viable for use in big, heavy vehicles that haul and tow heavy loads – oftentimes, across long distances – a sentiment that Farley recently restated while speaking during the automaker’s Q4 2024 earnings call with investors.
“But for larger retail electric utilities, the economics are unresolvable,” Farley said. “These customers have very demanding use cases for an electric vehicle. They tow, they go off-road, they take long road trips. These vehicles have worse aerodynamics and they’re very heavy, which means very large and expensive batteries. Retail customers have shown that they will not pay any premium for these large EVs, making them a really tough business case given the expense in the batteries.”
“For Ford, our commercial customers do show potential for large EVs. They’re willing to pay a premium over ICE because they can really measure the TCO [true cost of ownership] advantages of EV, and they can live with depot charging. They don’t have the same range anxiety that retail customers have. Profitability for these larger family haulers that take long trips will be more frequently occurred through partial electric options.”
Given this strategy, Ford plans to offer a very “limited scope” of large EVs for the foreseeable future, all while Farley pushes the need for consumers to embrace smaller models, calling those types of vehicles the “sweet spot” for electric power at the moment. This shift in strategy is a big part of the reason why Ford recently canceled its plans to build a pair of three-row EV crossovers, which have effectively been replaced by hybrids.
Comments
The smaller EVs are the way to in the near future or until battery technology is dramatically improved. Having owned and driven a Mustang Mach E 4X First Edition for 3 years, it’s clear to me what EV you buy, it will not produce all the savings if you routinely travel more than 100-150 miles on a daily basis. It’s just not range limitation but the cost of public charging may be more than the cost of an ice vehicle. Home charging is great, but if you live in a condo or apartment, the cost changes dramatically.
Jim, I agree. Smaller commuter based vehicles will be the most attractive as we enter this new propulsion phase. My neighbor across the street uses his Tesla L for exactly that purpose. He’s a commercial airline pilot and drives largely to the airport where he plugs in, presumably at a discounted rate, then drives back home. I’m sure he uses it for local use, but they still have their ICE vehicles for longer trips. Plus, if you own and older home with only 100 AMP Service, even charging at home can become an issue, as I understand, at home unit can absorb around 80 AMPS during charging. Upgrading from 100 to 200 AMP service is around $3,000 to $4,000. So in some cases, this can be another added cost.
You can set the car to charge at maybe 30 amps overnight, so you don’t need humungous service. Not much runs at night anyhow except maybe a heat pump. Dryer, water heater, stove. You also probably don’t need to charge every night unless you drive a horrendous amount.
It’s almost like offering customers options and letting them decide what is best for themselves makes some sense.
Wow, Jim Farley knows the limitations of the Electric Battery. Tell that to the American Consumer ! Also explain it to the Freight Haulers who have to get their products and fresh produce from Florida and California on time to the markets in New York , and Chicago !
I agree with Farley that small EVs are the sweet spot. So how about building some? Europe has the Capri and Puma EV, where’s ours?? Not to mention all the other small EVs they enjoy from every other company, that we can’t buy in the USA.