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Ford aims to compete with cost-efficient Chinese EVs

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Automaker says new midsize pickup will target $30,000

price

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Company has scaled back EV goals and delayed launches

By Nora Eckert

DETROIT, Aug 11 (Reuters) - Ford plans to start rolling

out its new family of affordable electric vehicles in 2027,

including a midsize pickup truck with a target starting price of

$30,000, the company said on Monday, as it aspires to the cost

efficiency of Chinese rivals.

The new midsize four-door pickup will be assembled at the

automaker's Louisville, Kentucky, plant. Ford is investing

nearly $2 billion in the plant, which produces the Escape and

Lincoln Corsair, retaining at least 2,200 jobs, it said in a

statement.

Chinese carmakers such as BYD have streamlined

their supply chain and production system to produce EVs at a

fraction of the cost of Western automakers. While these vehicles

have yet to enter the U.S. market, Ford CEO Jim Farley said they

set a new standard that companies like Ford must match.

"We have all lived through far too many 'good college tries'

by Detroit automakers to make affordable vehicles that ends up

with idled plants, layoffs and uncertainty. So, this had to be a

strong, sustainable and profitable business," Farley said in a

release Monday.

Ford has been developing its affordable EVs through its

so-called skunkworks team, filled with talent from EV rivals

Tesla and Rivian. The California-based group,

led by former Tesla executive Alan Clarke, has set itself so

much apart from the larger Ford enterprise that Farley said even

his badge could not get him into its building for some time.

EVs sold for an average of about $47,000 in June, J.D. Power

data showed. Many Chinese models sell for $10,000 to $25,000.

Affordability is a top concern among EV shoppers, auto

executives have said, and the global competition for delivering

cheaper electric models is heating up.

EV startup Slate, backed by Amazon ( AMZN ) CEO Jeff Bezos, is aiming

for a starting price in the mid-$20,000s for its electric

pickup. Tesla has teased a cheaper model, with production

ramping up later this year. Rivian and Lucid are also

planning to roll out lower-priced models for their lineups,

although price points are in the $40,000s to $50,000s.

Since rolling out plans earlier this decade to push hard

into EVs, Ford has pulled back as the losses piled up. It has

scaled back many of its EV goals, canceled an electric three-row

SUV, and axed a program to develop a more advanced electrical

architecture for future models.

Ford last year announced it would start building its midsize

truck from the skunkworks team in 2027.

The automaker earlier this year estimated losing up to $5.5

billion on its EV and software division. It lost nearly $10

billion combined on those operations from 2023 to 2024.

Cutting costs on battery-powered models has been one of the

primary goals of Farley, who has said he expects this new family

of EVs to be profitable within one year.

Ford sells three EVs in the U.S.: the Mustang Mach-E SUV,

E-Transit van, and F-150 Lightning pickup. Sales of those

vehicles fell 12% in the first half from the year-ago period.

Meanwhile, interest in hybrids has surged, with sales up 27%

over the same window. Ford recently pushed back production of

its next-generation F-150 Lightning and E-Transit to 2028.

The elimination of a $7,500 consumer tax credit, loosening

regulations on emissions and reduced funding for charging

infrastructure are expected to further dampen demand.

All this makes it more important for automakers to pick

their lanes, Farley has said.

"The pure EV market in the U.S. seems to us very clear:

small vehicles used for commuting and around town," Farley told

analysts on an earnings call last month.

By contrast, crosstown rival General Motors ( GM ) has

electrified vehicles across its entire lineup, from the hulking

Hummer to the smaller Equinox SUV. GM spent more time upfront

building a ground-up platform as a base for its EV models.

Meanwhile, Ford has reconfigured many of its popular

gasoline-powered vehicles with batteries to get to market

sooner, delaying the development and launch of a unified EV

platform, details of which it unveiled on Monday.

While being out front has exposed Ford to more EV demand

fluctuations over the past two years, it has also learned more

about the market, Farley has said.

Ford is using lithium-iron-phosphate, or LFP batteries, for

the forthcoming family of EVs. The batteries are produced in

Marshall, Michigan, using technology from Chinese EV-battery

maker CATL that has helped to bring down the sticker price of

electric cars.