Skunkworks team has been working on a platform that cuts EV costs, reveals CEO
CHARLIE MARTIN
Ford has for two years had a secret team of engineers working on a new platform for affordable electric cars, CEO Jim Farley has revealed.
Speaking as Ford released its fourth-quarter financial results for 2023, Farley said the company is “adjusting our capital [investment], switching more focus onto smaller EV products”.
He continued: “Now this is important, because we made a bet in silence two years ago. We developed a super-talented skunkworks team to create a low-cost EV platform. It was a small group, a small team, with some of the best EV engineers in the world, and it was separate from the Ford mother ship. It was a start-up.
“And they’ve developed a flexible platform that will not only deploy to several types of vehicles but will be a large installed base for software and services that we’re now seeing at Pro.”
Ford Pro is the company’s stand-alone commercial vehicle division, responsible for the Transit van and F-150 pick-up truck.
Investment in higher-volume, lower-cost EVs – potentially destined to serve as indirect successors to the Fiesta and Focus – comes in response to Ford finding that most buyers won’t pay over the odds to go electric.
Farley added that the availability of cheap credit pre-pandemic, the pent-up demand for cars amid the chip crisis and the rapid rise in early adopters of EVs “gave us too optimistic a demand signal”.
This drove a “temporary spike in supply” as Ford struggled to find buyers for EVs it had built once early adopters were satisfied.
“As the Covid shock retreated, we learned that as you scale EVs to 5000-7000 units a month and you move into the [mass market], they aren’t willing to pay a significant premium for EVs,” said Farley.
He predicted an impending “huge moment”, pointing to the rate at which prices of hybrid cars and electric cars are aligning in the US once EV subsidies are factored into the equation.
US president Joe Biden’s Inflation Reduction Act last year introduced a $7500 (£5950) tax credit towards the purchase of an EV.
From this year, qualifying cars’ batteries must not use any components sourced from “a foreign entity of concern”, which includes China and Russia.
Ford’s Mustang Mach-E SUV has become ineligible, owing to its use of a l
