Ford’s CEO has acknowledged that small electric cars are key to mass adoption and profitability. Ford currently doesn’t make a small electric car in the U.S. Ford has been a proponent of pickup trucks and SUVs, but it has discontinued production of its cars and small SUVs.
Ford is moving away from large electric vehicles like the F-150 Lightning pickup truck to focus on smaller models in response to rising battery costs, Business Insider reports.
After declaring that Americans need to move away from the “massive vehicles” like pickup trucks and SUVs that currently form the core of Ford, CEO Jim Farley told investors on an earnings call Wednesday that smaller electric vehicles will be key to mass adoption and profitability.
Jim Farley
“We believe smaller, more affordable vehicles are the right path for EV volume,” Farley said. That’s largely due to battery costs. While the mantra for internal combustion vehicles is “the bigger the vehicle, the higher the margin,” that’s different with EVs, the CEO said.
“The bigger the vehicle, the bigger the battery, the more pressure there is on margin because customers aren’t going to pay a premium for those bigger batteries,” Farley said. That appeared to show up in Ford’s first-quarter earnings, as the automaker promised more affordable electric vehicles while reporting big losses on the electric vehicles it was already making.
2025 Ford Three-Row SUV –
Ford initially tried to replicate its success with large internal combustion vehicles, launching the Lightning and planning to follow up that full-size truck with a next-generation electric truck and a now-delayed three-row SUV. But the shift in thinking by Farley and other executives has been evident for months. During the automaker’s fourth-quarter 2023 earnings call, Farley said Ford was pursuing smaller, less expensive electric vehicles to address “new market realities.”
Affordable electric vehicles may beat out larger, more expensive models in Ford’s product lineup, but all-electric vehicles still need to compete for resources with the automaker’s highly profitable internal combustion trucks and SUVs. Ford announced last week that a Canadian plant previously slated to make electric vehicles will instead build heavy-duty pickup trucks.
