Ford Announces A Profitable $30,000 EV By 2027

The Blue Oval is confident that its affordable electric car will be profitable from the get-go.

Ford CEO Jim Farley confirms that the American auto marque is set to release a profitable $30,000 EV by 2027. We know that Ford has been working on an affordable electric car for quite some time now. You might already know that Ford quietly created a so-called Skunkworks lab around 2 years ago to develop a low-cost EV platform. That could underpin the upcoming affordable EV. The need for inexpensive electric cars has never been so dire. Many auto giants are concerned due to the increased competition in the market due to cheap Chinese EVs.

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Ford To Launch $30,000 EV By 2027

In recent times, we have seen new EV startups like Fisker filing for bankruptcy, Rivian struggling to generate profits, and many similar cases. Therefore, carmakers are now focusing on profitability to establish a sustainable business. Jim Farley mentions in a CNBC interview that big EVs can’t be profitable because just the battery costs $50,000.

He said, “You have to make a radical change as an [automaker] to get to a profitable EV. The first thing we have to do is really put all of our capital toward smaller, more affordable EVs. That’s the duty cycle that we’ve now found that really matches. These big, huge, enormous EVs, they’re never going to make money. The battery is $50,000. … The batteries will never be affordable.”

A Ford spokesperson later clarified that Farley meant large vehicles like the Super Duty models or others which need colossal batteries to achieve over 500 miles of range. He was not talking about the F-150 Lightning. Just to understand how difficult the situation is, Ford’s EV department lost $1.32 billion in Q1 of this year on 10,000 vehicles sold. This also includes EV-related businesses such as software. In total, the Blue Oval lost a whopping $132,000 per vehicle.

Farley concludes by saying, “If we cannot make money on EVs, we have competitors who have the largest market in the world, who already dominate globally, already setting up their supply chain around the world,” he said. “And if we don’t make profitable EVs in the next five years, what is the future? We will just shrink into North America.” He is stressing on the fact that Americans will need to fall in love with small cars once again. Large EVs just don’t make financial sense. Hence, the $30,000 EV will ensure that it is profitable from day one.

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Learn Electric Cars Says

I believe this is a perfect example to comprehend the necessity of profitability in electric mobility. Therefore, the high cost is not just an issue for the buyers, but for the carmakers too. They are squeezed for margins which is why they have to pass it on to the potential buyers. On top of that, the pressure from immensely affordable Chinese EVs is severe. One can understand why most carmakers are rooting for tariffs on China-made EVs.

Until that situation prevails, car companies need to chalk out effective strategies to bring down the costs of their electric cars. It makes sense to invest in small EVs for the next few years. In fact, that is something we are witnessing increasingly. OEMs like Kia, Hyundai, Ford, Volvo, Rivian, Chevrolet, Stellantis, Volkswagen, etc., are all aiming to launch budget EVs. That seems to be the only way forward to boost demand and make EVs mainstream. Let us keep an eye out for more developments as they unfold.