Ford CEO admits small, affordable EVs key to combat Tesla Model 2, rising red tide without burning money

Ford has been facing something of a profitability problem in its EV division, with the company estimating up to $3 billion in lost revenue from its EV business in 2023 alone. At the Wolfe Research Global Auto Conference, Ford's CEO, Jim Farley, commented on his strategy for making EVs successful going forward, and it involves a rather steep departure from Ford's recent design trends.

Speaking at the conference, Farley said (via Automotive News) that Ford would be investing heavily into developing a small, affordable EV that can reach profitability in 12 months or less.

"It's nonnegotiable that we're going to allocate capital to a new affordable electric vehicle ... and you have to make money in the first 12 months," Farley said, further commenting that "What the customer has now said to us is, if you have [an EV] larger than Escape, it better be really functional or a work vehicle."

Farley's other comments indicated that the new EV would be targetting better economics and operational costs than econoboxes, like the Toyota Corolla and Honda Civic, specifically citing the fairly compact Ford Escape as a size ceiling for those targets. 

Ironically, right around the time Ford started investing more heavily in electric vehicle production, it started to shift away from compact cars, eventually culminating in the closure of its last Fiesta production line in Cologne, Germany. The German facility producing the Fiesta would later be repurposed to produce the all-electric Explorer — a full-size seven-seater SUV.

Exactly when to expect a compact hatch from Ford is a mystery for now, but Farley seems to be wasting no time, especially taking his comments about aggressive competition from China that is expected to land in the US in the coming years. That said, Notebookcheck previously reported about a cheap Ford compact EV skunkworks project that was apparently targetting a 2024–2025 launch window.

When Ford does eventually re-enter the compact car market with an electric EV, it may be faced with an uphill battle, thanks to staunch competition in the sector. Fiat and its 500e and 600e, alongside the Mini Cooper SE, as well as the upcoming Renault 5 EV are all strong contenders in Europe, while Tesla and Chevrolet are both reportedly planning affordable compact options that should come in at under $25,000 MSRP.

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