Ford shifts focus by racing Tesla to $25k compact EV

Ford shifts focus by racing Tesla to $25k compact EV

Ford’s Jim Farley and Tesla Elon Musk

Ford is planning to delay some electric vehicle plans in favor of a lineup of small, compact $25,000 EVs that could launch shortly after Tesla launches a car at the same price point, a new report says.

Of all the legacy automakers that have made a truly dedicated effort to transition to EVs, Ford and General Motors are arguably the most committed.

However, Ford has felt the growing pains of launching EVs, including fighting for profitability and softening the blow of losing tens of thousands on every unit it sells.



During its most recent earnings call, the company said it would slow down production of some of its EVs, including the F-150 Lightning.

In February, we reported on the creation of a “skunkworks” team that Ford was operating independently and creating a new electric vehicle platform that would lower cost and change the focus from large vehicles to smaller ones.

CEO Jim Farley said, “We’re going to spend less capital on larger EVs. And as we’ve always said, we’ll have a very small number of those…We’re also adjusting our capital switching more focused on to smaller EV products. Now, this is important because we made a bet in silence two years ago. We developed a super-talented skunkworks team to create a low-cost EV platform. It was a small group, small team, some of the best EV engineers in the world, and it was separate from the Ford mothership.”

Now, it appears Ford has actually mapped out the changes and will begin developing and building low-cost EVs as soon as 2026, according to a new report from Bloomberg.



Ford is planning to develop a compact SUV, a small pickup, and another vehicle that could eventually be utilized for ride-hailing. The first vehicle is set to arrive in late 2026 and will cost around $25,000.

The compact EV will be powered by lithium-iron-phosphate battery packs, which are less expensive than lithium-ion batteries.

Farley expects the vehicles to turn a profit within a year of being available to customers, and Ford seems to emphasize this non-negotiable point as it needs to stop the bleeding in its Model e division.

Tesla is already in the process of developing its $25,000 EV, and it plans to start production sometime in the latter half of 2025.

While some analysts believe it will be introduced in 2027, the potential for a new EV from Tesla that would cut well below the average cost of a new vehicle would be monumental for the company.

GM already has the Chevy Bolt EV and EUV, which have undercut Tesla’s prices for some time. Although it is cheaper, it still is not more popular than the Tesla Model Y or Model 3, so affordability may not necessarily be Ford’s key to beating Tesla in the EV game.

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