Ford Uncovers Vision for Inexpensive, Reported EVs Post Earnings Success

Feb 07, 2024 11:54 PM EST

RED CAR PARKED ON PARKING LOT — (Photo : PEXELS/Erik Mclean)

During its 2023 earnings discussion with analysts, Ford disclosed its initiative to create a cost-effective electric vehicle (EV) platform aimed at swiftly introducing new models and achieving profitability within a year. Ford targets to gain substantial profits in its future EV lineup, dubbed Model e. It plans to offer additional software and services to customers post-purchase.

Ford Affordable EVs to Grace Market Soon

In Ford's earnings call on February 6, CEO Jim Farley unveiled the company's endeavors to broaden its footprint in the EV market. Farley said that for the preceding two years, a secret "skunkworks team" had been working on creating a unique platform for electric vehicles.

According to The Street, amid Ford Motor Company's temporary retreat from the electric vehicle sector, a team of engineers has been diligently crafting a specialized, Ford affordable EV platform, as revealed by CEO Jim Farley during the company's 2023 fourth-quarter earnings report to its analysts on Tuesday.

The assembled highly skilled skunkworks team will construct a low-cost EV platform. The team comprised a select group of top-tier EV engineers, operating independently from the core Ford operation.

Furthermore, Farley explained that the endeavor resembled a startup, with the team developing a flexible platform adaptable to various vehicle types. This platform not only serves as a foundation for software and services but also contributes to the offerings seen in Pro.

The Shift: Large EVs to Small EVs

Farley indicated that Ford plans to allocate fewer resources to larger EVs such as the current F-150 Lightning, with only a limited number of them targeted at specific geographies and product segments where the company holds a significant advantage, particularly in trucks and vans.

These models are expected to feature breakthrough efficiency compared to Ford's initial generation of EV products. The majority of Ford's EV product strategy will be directed towards smaller, more affordable models.

As shared by Bloomberg, the leadership of the small team falls under Alan Clarke, who serves as the executive director of advanced EV development. Clarke joined Ford two years ago following over 12 years of experience in developing models for Tesla.

According to Farley, the forthcoming EV platform will serve as the foundation for "various types of vehicles," aiming to yield profitability. Ford's current lineup of battery-powered models incurred a loss of $4.7 billion last year, and projections suggest the losses may escalate to as much as $5.5 billion this year.

Farley emphasized that Ford was far from reaching its earnings potential, underscoring the intense focus of all EV teams within the company on cost and efficiency in their EV products. He pointed out that the primary competition would arise from affordable Tesla models and Chinese EVs.

Last Year's Success

As reported by Detroit Free Press, On Tuesday, Ford Motor Co. disclosed adjusted earnings before interest and taxes (EBIT) for 2023, amounting to $10.4 billion, consistent with the figures of $10.4 billion in 2022 and $10 billion in 2021. In the fourth quarter alone, Ford reported EBIT of $1.1 billion, a decrease from $2.6 billion recorded a year earlier.

In terms of revenues, the Dearborn automaker reported $176.2 billion for 2023, marking an increase from $158 billion in 2022. For the fourth quarter specifically, Ford's revenues stood at $46 billion, up from $44 billion reported a year ago.