“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,” Farley said during an interview with CNBC’s Julia Boorstin.
“That’s the duty cycle that we’ve now found that really matches. These huge, enormous EVs are never going to make money: the battery is $50,000, even with low-nickel, LFP chemistry. They will never be affordable.”
Of course. Farley is publicly admiting the obvious.
All of Ford’s failure with electric vehicles was due to design choices. A lineup consisting entirely of oversized pick-ups, vans, and obese mustangs is not a serious attempt at selling cars. It was an attempt to price-gouge consumers in post-pandemic automarket.
“We totally misinterpreted the '21 and '22 spike in sales,” Farley said. "We should have put two and two together but we didn’t. When we had the chip crisis, there was a bonanza of supply-driven demand. There was nothing to buy. Shelves were completely empty. Tesla, because of the way they did the Model 3 and (Model) Y electric architecture, they could build as many as they could build. They had no chip issues. In that moment, When Y was relatively new, they could scale very quickly for Model Y and the prices exploded for them. It went from about $50,000 to $70,000 and stayed there for about 18 months. And everyone looked at that, including Ford, and said that’s the new norm. It wasn’t the new norm
I still maintain that Chinese imports should be allowed. It’s not a coincidence that the mere threat of BYD got Ford to suddenly magic up small affordable cars.
“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,” Farley 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.”
