American legacy automaker Ford has just announced plans to develop and launch affordable electric vehicles with a sub-$30,000 price point to achieve profitability.
Ford reported a tremendous loss on every electric vehicle it sold in the first quarter, totaling $1.3 billion.
Ford mimics Tesla’s low-cost EV plans amid waning demand
Ford Chief Executive Jim Farley recognized that the market wants affordable electric vehicle models, even citing the recent price cuts on the popular Mustang Mach-E. Therefore, the company plans to deliver them in its next-gen lineup.
During the Q1 2024 Earnings Call, CEO Farlet announced that the EVs will have a price range of $25,000 to $30,000.
“Increasingly, our bet will be on our new small affordable platform developed by our team on the West Coast.”
Ford CEO Jim Farley
The Chief Executive also disclosed that Ford’s EV strategy will primarily aim at urban and suburban customers who prioritize affordability over long-range.
“The more affordable we can make a great product, the more attractive it is to these mainstream EV adopters.”
Ford CEO Jim Farley
The Ford boss assured its investors that the planned low-cost EVs would be profitable, which was crucial for the company after recording a huge loss in the first quarter.
“What’s really exciting for us is we see an opening in the market. We believe we can be profitable at $25,000 or $30,000.”
Ford CEO Jim Farley
Ford Model e reported huge loss
Ford’s electric vehicle unit Model E reported a $1.3 billion loss in the first quarter of the year. This figure equates to $132,000 for every unit of the 10,000 EVs it sold in the said period. This significant loss drove down Ford’s overall earnings.
Ford Model e’s EV sales also hit a 20% year-on-year decline in Q1 2014. In addition, its revenue declined 84% to about $100 million.
According to parent company Ford, these losses were largely due to the industry-wide price cuts. The company disclosed that it reduced each Mach E’s costs by about $5,000.
In the meantime, Ford plans to add capacity to its popular hybrid models, such as the F-150 PowerBoost and Maverick Hybrid, to remain relevant in the highly competitive market.
