Ford to undercut Tesla Model 3 with new affordable EV

Posted on July 2, 2024Comments Off on Ford to undercut Tesla Model 3 with new affordable EV

Ford is in the process of developing a US$30,000 (~A$45,000) electric vehicle (EV), and CEO Jim Farley expects it to hit US showrooms by 2027.

Speaking at the Aspen Ideas Festival last Friday, Mr Farley hinted that Ford’s new affordable EV will be a smaller car rather than a large SUV or pickup.

With a base price of US$30,000, it’ll undercut the Tesla Model 3 which opens at US$33,990 (A$51,152) in the US market.

Mr Farley explained during an interview with CNBC that Ford plans to pivot towards smaller EVs for its future model range after the EV side of the business lost in excess of A$2 billion over Q1 this year.

The manufacturer is expecting to lose more than US$5.5 billion (A$8.43bn) on battery-powered models in 2024.

“You have to make a radical change as a [manufacturer] to get to a profitable EV. The first thing we have to do is really put all of our capital toward smaller, more affordable EVs,” Mr Farley told CNBC.

“We have to start to get back in love with smaller vehicles. It’s super important for our society and for EV adoption.

“We are just in love with these monster vehicles, and I love them too, but it’s a major issue with weight.

“These big, huge, enormous EVs, they’re never going to make money. The battery is US$50,000… The batteries will never be affordable.”

Ford’s current EVs – the Mustang Mach-E SUV, F-150 Lightning ute and E-Transit van – are all medium-to-large vehicles.

Earlier this year, it reportedly delayed a new, full-sized electric SUV for North America.

It also slashed prices across its EV range in Australia, with cuts of up to $8000 on Mustang Mach-E and by $15,000 on E-Transit.

Introducing cheaper, entry-level EVs is a priority for the carmaker, as it targets a profitable electric portfolio.

“If we cannot make money on EVs, we have competitors who have the largest market in the world, who already dominate globally, already setting up their supply chain around the world,” said Mr Farley.

“And if we don’t make profitable EVs in the next five years, what is the future? We will just shrink into North America.”

Ford is launching the Volkswagen MEB platform-based Explorer mid-sized crossover in Europe this year, with the small Puma Gen-E EV also set to be revealed during 2024.

MORE: Ford slowing electric car rollout as losses mount
MORE: Ford slashes EV prices again in Australia