Photo: Ford
Ford CEO Jim Farley revealed during the Q4 2023 earnings call that a specialized team has been working on a new low-cost EV platform. The "skunkworks" team has developed a flexible platform that will underpin a wide range of Ford's next-generation EVs and become profitable from the get-go.
Ford reported the 2023 financial results, and while the ICE business returned hefty profits, the EV division Ford e was the black sheep of the earnings call. Since Ford is one of the few carmakers breaking down the financial results of its EV business, we know that Model e lost $4.7 billion in 2023, of which $1.6 billion only in Q4 2023. Put simply, Ford lost $47,000 per EV unit sold in Q4 2023. This contributed to the $526 million net loss Ford reported in the fourth quarter of last year.
These results probably made CEO Jim Farley spend more time discussing the EV strategy and how it sees the path to profitability. Farley revealed that a specialized team has been working for the past two years on a new flexible EV platform that would turn things around at the Ford Model e division. Farley was optimistic that the new platform would allow Ford to report profits within 12 months of production. This is the same as admitting that the current EV lineup will not be profitable by 2026, as Ford previously announced.
An intriguing detail in Farley's presentation was that the development of the new EV platform was assigned to a "super-talented skunkworks team." The unit, which gathered "some of the best EV engineers in the world," worked separately from "the Ford mothership" as a startup. The new architecture has been designed as a low-cost EV platform able to compete with Tesla and Chinese carmakers in terms of costs and performance. The new platform will provide a solid foundation for the company's Gen-2 electric vehicles.
Ford is overhauling its EV strategy and bet big on smaller cars, mostly two-row crossovers, now the most popular segment. The carmaker will spend less on developing large EVs, with only a few kept in segments where Ford has a dominant advantage, like trucks and vans. The new platform will ensure breakthrough efficiency compared to the Gen-1 EVs and "innovations that customers are going to be excited to pay for."
Ford's focus will switch to smaller EVs in the future, and the new flexible platform will allow it to scale to several types of vehicles with a large install base. This will enable Ford to sell software and services the kind it now sells to its Ford Pro customers. Farley also promised that Ford's EV teams would be "ruthlessly focused on cost and efficiency" as they target competition from affordable Tesla EVs and the Chinese OEMs.
To reach the cost and efficiency targets, Ford will also reconsider its battery production capacity and vertical integration, two factors contributing to Tesla's success. The Blue Oval will explore new chemistries and capacities to deliver the performance and efficiency the market requires. All these measures make Farley confident that Gen 2 electric vehicles will become profitable in the first 12 months of their launch.
These results probably made CEO Jim Farley spend more time discussing the EV strategy and how it sees the path to profitability. Farley revealed that a specialized team has been working for the past two years on a new flexible EV platform that would turn things around at the Ford Model e division. Farley was optimistic that the new platform would allow Ford to report profits within 12 months of production. This is the same as admitting that the current EV lineup will not be profitable by 2026, as Ford previously announced.
An intriguing detail in Farley's presentation was that the development of the new EV platform was assigned to a "super-talented skunkworks team." The unit, which gathered "some of the best EV engineers in the world," worked separately from "the Ford mothership" as a startup. The new architecture has been designed as a low-cost EV platform able to compete with Tesla and Chinese carmakers in terms of costs and performance. The new platform will provide a solid foundation for the company's Gen-2 electric vehicles.
Ford is overhauling its EV strategy and bet big on smaller cars, mostly two-row crossovers, now the most popular segment. The carmaker will spend less on developing large EVs, with only a few kept in segments where Ford has a dominant advantage, like trucks and vans. The new platform will ensure breakthrough efficiency compared to the Gen-1 EVs and "innovations that customers are going to be excited to pay for."
Ford's focus will switch to smaller EVs in the future, and the new flexible platform will allow it to scale to several types of vehicles with a large install base. This will enable Ford to sell software and services the kind it now sells to its Ford Pro customers. Farley also promised that Ford's EV teams would be "ruthlessly focused on cost and efficiency" as they target competition from affordable Tesla EVs and the Chinese OEMs.
To reach the cost and efficiency targets, Ford will also reconsider its battery production capacity and vertical integration, two factors contributing to Tesla's success. The Blue Oval will explore new chemistries and capacities to deliver the performance and efficiency the market requires. All these measures make Farley confident that Gen 2 electric vehicles will become profitable in the first 12 months of their launch.
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