Photo: Ford
During the Q4 2023 earnings call, Ford CEO Jim Farley talked about the company's efforts to develop the next-generation EV platform as a side project. The "skunkworks team" tasked with developing the new platform has been found to include several ex-Tesla engineers, potentially putting Ford on a collision course with the EV maker.
Ford's EV division Model e booked a massive $4.7 billion net loss in 2023, tanking Jim Farley's hopes to become profitable by 2026, as he previously promised. The $1.6 billion loss in the fourth quarter made Ford report a net loss of over half a billion dollars, which undoubtedly rattled investors. No matter how much money Ford made on its other lines of business, the EV division needs a quick turnaround. Jim Farley is well aware of this because he used most of his speech to talk about Ford's EV plans to cut costs and become profitable.
The key takeaway of the earnings call was that, sadly, Ford's EV business will not be profitable with the current products, not in 2026 nor ever. Ford needs a new EV lineup, more efficient manufacturing, and a ruthless cost-cutting strategy to make that happen. The good news is that Ford is preparing a new EV platform, which Farley called Gen-2, to deliver precisely these benefits. The Gen 2 platform will underpin a wide range of EV models but won't arrive until 2026. Farley is confident that the new architecture will allow Ford EVs to become profitable within one year after the start of production.
The story around Ford's next-gen platform is intriguing. Farley let everyone know that the development was carried out not by Ford but by a "skunkworks" team from outside the company, working as an independent startup. I'm not sure how this boosts investor confidence in Ford's ability to deliver on its EV strategy. It sounds more like Farley lacked confidence in Ford's engineers and preferred to commission the development of a new platform to an outside team.
The team, uniting "some of the best EV engineers in the world," as Farley bragged during the earnings call conference, has been working on the project for the past two years. What's bizarre is that the team appears to employ several ex-Tesla employees. The project is led by Ford's Advance EV development boss, Alan Clarke, who previously worked at Tesla. TechCrunch revealed that Clarke is not the only ex-Tesla engineer working on the new project.
In November 2023, Ford acquired the EV startup Auto Motive Power (AMP), whose founder, Anil Paryani, is also part of the skunkworks project. Paryani worked at Tesla between September 2007 and March 2013, overlapping Clarke's stint for over four years. While Clarke was responsible for much of the Model S and Model X engineering before being promoted to director of New Programs Engineering, Paryani is a battery expert who worked on the battery management algorithms for the Model S.
I don't question the results, although there will be at least two more years before we see the fruits of their work. Ford might have a chance at getting its next EVs right. However, it's also true that using ex-Tesla engineers might put Farley on the collision course with a contentious Elon Musk. Tesla is still battling Rivian in court after the EV startup hired dozens of Tesla engineers. Tesla is accusing Rivian of stealing trade secrets and, more specifically, core technologies for the next-generation batteries. Maybe that's why Farley wanted a "skunkworks" team instead of Ford employees.
The key takeaway of the earnings call was that, sadly, Ford's EV business will not be profitable with the current products, not in 2026 nor ever. Ford needs a new EV lineup, more efficient manufacturing, and a ruthless cost-cutting strategy to make that happen. The good news is that Ford is preparing a new EV platform, which Farley called Gen-2, to deliver precisely these benefits. The Gen 2 platform will underpin a wide range of EV models but won't arrive until 2026. Farley is confident that the new architecture will allow Ford EVs to become profitable within one year after the start of production.
The story around Ford's next-gen platform is intriguing. Farley let everyone know that the development was carried out not by Ford but by a "skunkworks" team from outside the company, working as an independent startup. I'm not sure how this boosts investor confidence in Ford's ability to deliver on its EV strategy. It sounds more like Farley lacked confidence in Ford's engineers and preferred to commission the development of a new platform to an outside team.
The team, uniting "some of the best EV engineers in the world," as Farley bragged during the earnings call conference, has been working on the project for the past two years. What's bizarre is that the team appears to employ several ex-Tesla employees. The project is led by Ford's Advance EV development boss, Alan Clarke, who previously worked at Tesla. TechCrunch revealed that Clarke is not the only ex-Tesla engineer working on the new project.
In November 2023, Ford acquired the EV startup Auto Motive Power (AMP), whose founder, Anil Paryani, is also part of the skunkworks project. Paryani worked at Tesla between September 2007 and March 2013, overlapping Clarke's stint for over four years. While Clarke was responsible for much of the Model S and Model X engineering before being promoted to director of New Programs Engineering, Paryani is a battery expert who worked on the battery management algorithms for the Model S.
I don't question the results, although there will be at least two more years before we see the fruits of their work. Ford might have a chance at getting its next EVs right. However, it's also true that using ex-Tesla engineers might put Farley on the collision course with a contentious Elon Musk. Tesla is still battling Rivian in court after the EV startup hired dozens of Tesla engineers. Tesla is accusing Rivian of stealing trade secrets and, more specifically, core technologies for the next-generation batteries. Maybe that's why Farley wanted a "skunkworks" team instead of Ford employees.
Google News