For the last two years, a small "skunkworks" at the Ford Motor Company has been working on a low-cost electric vehicle platform, according to Ford CEO Jim Farley. Farley revealed the existence of this new platform during the automaker's quarterly financial results call with investors on Tuesday evening. The company is rethinking its electrification strategy, having now faced up to the reality that the current crop of EVs are too expensive for mass-market adoption to take off.
Ford was early to market with its Mustang Mach-E crossover, itself the product of a skunkworks-style development process: an internal group called Team Edison, formed to add some excitement to what was originally going to be a more boring compliance car. The team also took the bold step of making a fully electric version of the country's bestselling vehicle, the F-150 pickup truck.
Demand for the electric F-150 Lightning appeared strong, but a series of price hikes has resulted in really expensive trucks languishing on dealer forecourts and Ford cutting production shifts to reduce output. The Mustang Mach-E is still selling, although with barely any growth year on year.
Ford also split its EV activities into a separate division, called Model e, which exposes just how much money this is all costing—a loss of $4.7 billion. That's quite a lot more than the $3 billion it thought Model e would lose in 2023.
Farley said the company will develop smaller and cheaper EVs, although he did not announce any specific new models by name. "All of our EV teams are ruthlessly focused on cost and efficiency in our EV products because the ultimate competition is going to be the affordable Tesla and the Chinese OEMs," he said.
"We made a bet in silence two years ago," Farley said of Ford's newest skunkworks. "They've developed a flexible platform that will not only deploy to several types of vehicles but will be a large install base for software and services," he told investors.
Ford may scale back some of its battery factory ambitions, too. "One of the things we’re taking advantage of in taking some timing delays is rationalizing the level and timing of our battery capacity to match demand and actually reassessing the vertical integration that we’re relying on, and betting on new chemistries and capacities," Farley said.
In 2023, Ford announced and then canceled a $3.5 billion plant to manufacture lithium iron phosphate battery packs in Michigan. But there are also three lithium-ion factories in the works in Kentucky and Tennessee.
Ford no longer expects Model e to be profitable by 2026, but Ford CFO John Lawler said that Model e would need to stop losing money "sooner or later."
"EVs are here to stay, customer adoption is growing, and their long-term upside is central to Ford+," said Lawler. "The customer insights we’re getting by being an early mover in electric pickups, SUVs, and commercial vehicles are invaluable—especially as we're developing next-generation EVs that are going to surprise customers and be profitable within a year of launch."
I was so disappointed when Smart Car pulled out of North America. Those cars were so great for city living, nothing as compact available in the US now.
I never got those cars. The only use case I could see was what you described: high density downtown living. They are small but that's it. They were not cheap. They were not efficient. They were not convenient in any way other than the footprint. And if you are living and driving in a downtown area where the small size is a benefit, there is a good chance walking or other public transit options are more available anyway.
They just seemed way too niche.
In Europe the inner cities have restrictions that only allow these sorts of cars in. Now some only allow mini electric cars in so we saw lots of Renault twizy cars
I used to live in a city where a Smart Car made a lot of sense. It was a dense, walkable neighborhood with a lot of amenities, but there were things outside the city that I couldn't get to by public transit. For those times I needed a car, but I'd often not move it for a week except to avoid a fine on street cleaning day.
Mine was a Scion xA, which was almost as tiny. And for commuting I had a scooter.
I once saw 3 people trying to fit into one of the convertible versions in a McDonalds parking lot. The 'back seat' passenger was trying to climb in through the open roof. I wish I would have stuck around longer to see how it turned out.
Did you hear yakkety sax in the distance?
A golf cart would be more economical and useful.
Also I think uber/lyft kinda killed the need for a city car for most people. Why buy a small useless car that you use maybe once a week for a butt ton of money. When you can pay $20 to drive to the other side of town? The savings on parking alone probably make it a better value.
They were also as mechanically reliable as a Mercedes... Seeing as how they had a Mercedes engine in them.
Agreed. Almost without fail it's easier on those environments to either be too rich to give a fuck what you drive or too poor and take transit at best.
They're completely fine for travel. I've taken one on the interstate numerous times. The owner, a driver known for not being great at driving, took it coast to coast (US). It's the downtown-parking car that takes you off the transit routes. It's the city car for the other 90% of the cities that aren't optimized for carless life and for people who travel to the suburbs and beyond. I considered one myself for a poor suburban parking situation. I ended up with a miata-length suzuki sidekick for the 4x4 snow fantasy and mildly better cargo situation without taking a big hit in fuel economy. It fares fine on the interstate too with all 90 screaming horses (and a little attention to wind)
The Smart Car wasn't a very good car though. Its engine was underpowered for how small it was, poor fuel economy, yet still required premium fuel. The transmission shifted like a teenager playing Grand Turismo on PS1 for the first time. The car also wasn't inexpensive.
The ONLY thing the Smart Car had over competitors was its small size, and for just a tiny bit bigger you could get a Prius C which fixed every single one of the Smart Car problems and even let you haul more than 1 bag of groceries.
I didn't own one and only rented so I never had to deal with maintenance or fuel. It was great for what I needed in the city and you could park it just about anywhere.