Ford CEO Jim Farley promises EVs as cheap as $30,000 will arrive next year, praises efforts despite losing money on electricity

FORD is working to produce a smaller, cheaper electric vehicle for American consumers, the company has confirmed.

During the company’s July 24 earnings call, Ford CEO Jim Farley introduced a new $30,000 small EV even though the electric fleet is losing billions.

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“Ford’s reconstruction is not without growing pains,” said the CEO.

“There is a lot of work ahead, but the future is clear to us.”

Farley said the company is looking to produce more profitable electric vehicles as it builds out its battery-powered fleet.

The automaker wants to build a broader mix of electric vehicles, including smaller cars with cheaper batteries.

The EV SUV market is highly competitive. Several manufacturers, including Toyota, Tesla, GM, Kia, Hyundai and dozens of other producers, have at least one EV SUV on the market.

Several manufacturers feature an SUV-only fleet of EVs.

Ford’s consumer fleet currently consists of a full-size pickup truck, the F-150 Lightning, and a midsize SUV, the Mustang Mach-E.

To reduce costs, Ford wants to build vehicles that use smaller batteries. Farley calls the goal of making a smaller EV “more realistic and sharper.”

The company hasn’t revealed many details about the potential new model beyond its size and price.

Farley predicted that prices for a new small car could be as low as $40,000 or as high as $30,000.

He also thinks the cars could be eligible for $7,500 federal tax credits.

Farley said the company needs to continue to “educate” consumers about “many misconceptions surrounding EVs,” including range, price and environmental benefits.

The potential new product comes after Ford reported a loss of $1.1 billion in its electric vehicle fleets in the quarter.

Farley also said its Pro brand of commercial electric vehicles has remained profitable.

Ford CFO John Lawler called the loss a “script-flipping” moment for the company. Billion-dollar losses are not uncommon for companies building their electric battery fleet.

Companies must spend a lot of money to research and develop battery components, train their employees to build new cars, and change their factory operations.

The announcements are in line with recent developments from the major American production brand.

Electric versus gas vehicles

Pros and cons of electric vehicles versus gasoline-powered vehicles

EV PROS:

• Convenient (when charging at home)
• Cheapest (depending on the state or city)
• Cheaper maintenance due to lack of mechanical parts
• Great for commuting
• Reduced CO2 emissions
• Federal and state tax incentives
• More performance (speed, handling – depending on make and model)

EV CONS:

• Higher initial cost
• Higher Insurance Rates
• More frequent tire and brake replacement intervals
• Higher tare weight (thus causing faster wear on crucial parts)
• Low resale value
• High depreciation rates
• Lack of charging infrastructure
• Unreliable public loading (related: slow loading times)
• Poor performance in winter and summer
• Lack of clean energy alternatives means more “dirty energy” from coal and nuclear sources
• Range anxiety

PROS OF GAS:

• Highly developed refueling infrastructure
• Fast replenishment
• Cheapest insurance rates depending on make, model and configuration
• Established repair industry
• Lower initial cost
• Greater range before refueling, especially with hybrids
• Many manufacturers produce engines with almost fewer emissions
• Cheaper refueling depending on location

CONS OF GAS:

• Finite resource (related: heavy dependence on oil)
• Carbon emissions/greenhouse gases
• Higher repair costs
• Higher insurance rates depending on make, model and configuration
• Varied costs at the pump depending on the state, city and municipality

Source: Driver, Perch Energy, Automatic Week

Ford has delayed production of its three-row electric SUV, the Explorer.

The company was supposed to pivot its factory in Ontario, Canada, toward electric development, but decided to continue producing its profitable Super Duty pickup trucks at the plant.

The market for three-row electric vehicles is also growing. Kia’s EV9 launched this year, competing with Rivian’s R1S and Tesla’s Model X.

Lucid is also preparing to launch its three-row Gravity SUV.

Overall, the company reported healthy revenue of $47.8 billion, but shareholders were unsure about its overall performance.

The company has experienced a series of recalls and maintenance issues on its 2021 vehicles. It spent more money than expected on warranty repairs.

Ford said it has simplified vehicle production and will streamline future vehicles. Farley said he doesn’t expect the company to pay large warranty bills on future products.

The automaker’s shares fell 11% at the close.

“We are making real progress in increasing quality, reducing costs and reducing complexity across our company,” Lawler said.

“We are making real progress in quality that will benefit us in the future.”