Ford pinning hopes on EV breakthroughs and smaller cars to fend off financial trouble

As the number 2 seller of electric vehicles in the US, Ford might appear to be doing well in the new market segment.

However, for the first 10,000 Ford-badged EVs sold in the first quarter of 2024, the company lost nearly AU$2 billion – equivalent to around $200,000 on each EV delivered.

Ford’s Model E division, responsible for the brand's electrification efforts, reported a $153 million revenue figure for the period – an 84% drop from the same time last year.

Sales figures also dropped by 20%, compared to the first quarter of 2023. Ford pointed to “pricing pressure” and “slower growth”, as customers have lost their enthusiasm for EV vehicles.

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Ford Pro, the commercial division responsible for the F-150 Lightning and E-Transit Van models, reported an 86% increase in sales over Q1 2023 – but a 22% drop compared to the previous quarter.

To address its nosedive, the company plans to tighten the purse strings, spending around $12-13 billion rather than the current $15 billion figure planned.

Ford CEO Jim Farley commented “We’ll probably be on the low end of that range, and we’re being very consistent about our discipline on profitability.”

Better times ahead?

Ford also “anticipates new battery chemistry and formats to substantially reduce the cost of batteries for that vehicle.”, including a lithium iron phosphate battery chemistry, offering better durability, faster charging, and more affordability compared to the current offerings.

This technology is being developed with China’s Contemporary Amperex Technology Co., Limited, with Ford planning to own and operate their own outright plant. Initial production is expected to commence in 2026.

Ford’s Silicon Valley-based 'skunkworks' group, led by ex-Tesla executive Alan Clarke, may also be the answer to Ford’s financial woes.

The designers on team are working on smaller and more affordable EVs, which Ford feels will win over urban dwellers at a more efficient price point.

“We believe [the city is] where the adoption of EV will grow the fastest, and we believe we can compete in segments of small cars and vehicles, more affordable vehicles in a unique way that’s Ford.” - Jim Farley, Ford CEO.