Amidst an electric vehicle (EV) sales slowdown, Ford is pivoting its zero-emission vehicle plan. The company shifted toward hybrids and made a flurry of moves that reduced Ford’s EV output. In February, Ford announced that the F-150 Lightning factory in Michigan would close on April 1. Reasons cited include the company’s inability to compete with Tesla in sales and performance, the slowing consumer demand, and the big one: money.
However, Ford doesn’t plan to move off EVs completely. According to CleanTechnica, a “not-so-secret” plan was revealed that CEO Jim Farley is moving toward affordable EVs instead of converted models. That includes a new small-size pickup truck and SUV that will cost around $25,000 MSRP. The car could cost even less after taxes with Inflation Reduction Act credits.
The move will see Ford introduce a smaller EV platform than the ones used for the Lightning — cheaper to build without losing functionality. This upcoming truck will likely be a touch larger than a Ford Escape.
A team of around 100 people is building these platforms in Irvine, California. The batteries will also be different. Rather than the typical lithium-ion varieties, Ford’s new EVs will use lithium-phosphate batteries, which are cheaper to produce.
It might sound like corner-cutting more than cost-saving, and we won’t know how the EVs’ performance will be affected until they are track-tested. The move comes amid Tesla dropping prices on some of their best-selling models and plans to introduce a $25,000 car next year. However, Elon Musk’s EV venture isn’t the main concern anymore.
Photo Courtesy Wikimedia
Legacy automakers are growing wary of Chinese EVs storming the market. BYD, the largest producer of EVs in China, has established a substantial presence in Asia and Europe. Much of that is due to its low-cost car, the Seagull, which costs under $10,000, far lower than even the most affordable American, German, Japanese, Korean, or Swedish EV on the road today.
BYD doesn’t have a North American presence — yet. There are rumors that the company is considering a plant in Mexico, where it could take advantage of the United States-Mexico-Canada Alliance (USMCA), formerly the North American Free Trade Agreement (NAFTA).
The 27.5% tariff on Chinese goods has helped keep BYD and other Chinese auto brands out of the U.S., but GM and Ford executives know their influence is growing. Bloomberg says China currently accounts for about 70% of global EV sales.
Electrek reported Ford believes low-cost EVs can get them back in the race.
The company has moved forward with a start-up to lead the research and development of this new EV platform. The company also wants a better return on EV investments.
Ford Model e, the electric car division, lost around $4.7 billion in 2023, the company earnings report said. That’s despite the F-150 Lightning overtaking the Rivian R1T as the best-selling electric pickup truck, and after the company sold about 700,000 hybrid cars worldwide in 2023. Ford was also one of the top three EV brands in 2023, the report said, with the Lightning and Mustang Mach-E becoming two of the top-selling EVs in the U.S.
Photo Courtesy Ford
It’s not just Ford changing their zero-emission strategy. GM is doing the same for almost the same reason: Tesla’s outperformance, slowing demand, and Chinese imports. The Detroit-based manufacturer is returning to the drawing board after rolling out the Hummer EV, Bolt, Equinox EV, Cadillac Lyriq, and a planned Silverado EV. GM cited problems with its Ultium battery pack production taking too long and minimal sales in 2023.
Even though Ford emerged as an EV leader last year, the traditional F-series was still the “best-selling truck in the United States” for the 47th straight year. The distinction included the Lightning, but gas-powered sales significantly outnumbered those.
It will take more than producing affordable electric pickups and SUVs for Ford to knock Tesla off its perch. The Model Y continues to dominate global EV sales. Ford isn’t walking away from EVs, but it is clear the company is restrategizing to remain America’s leading legacy EV producer.
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