Ford working on cut-price electric car

Ford has confirmed it is working on a new low-cost electric-vehicle platform to underpin a range of affordable city cars and SUVs to take on rapidly emerging rivals from China – and Tesla.

Internationally Ford has been faster than some rivals – including Japanese brands such as Toyota – in the move to electric cars, headlined by the electric F-150 Lightning pick-up and Mustang Mach-E SUV.

Yet slow sales have seen Ford wind back its electric-car attack due to slowing customer demand – halving production of the F-150 Lightning in December 2023 – prompting a change in strategy.

During an earnings reporting call with media and investors, Ford CEO Jim Farley said the strategy will see Ford focus less on large, expensive electric cars as high prices are the biggest barrier for customers of non-luxury brands to switch to electric power.

“[We’re] switching more focus onto smaller EV products,” Mr Farley said, the company having “made a bet in silence two years ago” to develop a low-cost electric-vehicle line.

Former Tesla lead engineer Alan Clarke, who worked for Elon Musk’s electric-car company for 12 years before defecting to Ford in 2022, is heading up the programme.

It will be a different platform to that planned for the upcoming electric Ford Puma Gen-E city SUV – due in Australian showrooms sometime after its 2024 unveiling in Europe – nor the Volkswagen MEB platform used by two larger Ford SUVs in Europe, as part of a collaboration between the two car makers that spawned the latest VW Amarok and Ford Ranger utes.

Ford will go it alone for its new project, with Volkswagen reportedly looking to partner with Renault to develop a cut-price small electric car of its own.

Both Ford and Volkswagen/Renault small cars would compete with the Chevrolet Bolt – one of the most affordable electric cars in the US – which will return to showrooms after a tie-up between General Motors and Honda to develop a new small electric car ended.

In Europe, Ford will face stiff competition from the electric Fiat Panda due in European showrooms mid-2024, using a cut-price electric-car platform shared with the new Citroen e-C3 electric (below).

The e-C3 is one of the cheapest electric cars on sale in Europe at around £21,000 ($AU40,600), undercutting the BYD Dolphin – which is the cheapest electric car on sale in Australia at $38,890 plus on-road costs.

Tesla has also announced its long-awaited, entry-level electric-vehicle range is due to go on sale in late 2025, expected to be priced at less than $US25,000 ($AU38,000).

Bloomberg reports the cheaper platform is part of Ford’s attempt to recoup heavy losses from its sales of electric vehicles, which amounted to $US4.7 billion ($AU7.2 billion) in 2023 and are forecast to reach $US5.5 million ($AU8.4 billion) in 2024.

This equates to a $US28,000 ($AU43,000) loss per electric Ford sold, according to Bloomberg Intelligence analyst Joel Levington.

Ford Chief Financial Officer John Lawler said the company does not expect to reach its previous goal of 8 per cent profit on electric cars by 2026.

Ford Australia introduced its first battery-electric vehicle – the E-Transit large van – in 2022, adding the Mustang Mach-E late in 2023.

It is due to further expand its electric line-up in 2024 with the E-Transit Custom mid-size van, while arrival timing of the Puma Gen-E is yet to be announced, so it may not arrive in Australia until 2025.

Stock of the plug-in hybrid Ford Escape SUV is selling out, though Ford Australia has plans to add a plug-in hybrid version of its most-popular model, the Ranger ute, in 2025.

Globally, Ford will focus on increased demand for petrol-hybrid models to offset slower growth of battery-electric vehicle sales in 2024, with Mr Farley saying the company expects a 40 per cent increase in hybrid sales.