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Ford's CEO, Jim Farley, is determined to make electric vehicles (EVs) affordable, looking at China's BYD for inspiration. This initiative is part of Ford's effort to reduce production costs and compete effectively in the EV market.
Ford's Cost-Reduction Strategy
Ford is the second-best-selling EV manufacturer in the United States, with first-quarter sales of approximately 20,000 vehicles. Finding a means to lower production costs for their models—which are still often priced more than conventional, internal combustion engine cars—remains the last obstacle for Ford and its closest rivals.
Farley stated, "Really it's the batteries and the one time investment for building the battery plants and the manufacturing facility and engineering these very different kinds of vehicles."
BYD's Dominance in China
Fortune specifies that Chinese manufacturers, including BYD, produce the vast majority of affordable EVs. China's dominance in the global EV industry can be attributed to its technological advantage in making car batteries, which are considerably more expensive than internal combustion engines.
"Not only will it be profitable, but also affordable for most Americans," says Farley of the company's next-gen EVs. Furthermore, the CEO states that Ford's upcoming EVs would be "competitive with the best in the business." Ford is under the impression that those EVs are coming from China.
According to Farley's interview with Yahoo Finance (via Electrek), China's strategic "bet on EVs" has "paid off so far," and now Ford is trying to bring some of that success to the United States.
Secret Development of Smaller EVs
Earlier this year, Farley disclosed that Ford was "secretly" developing a smaller EV architecture to support more reasonably priced cars. Additionally, Ford is postponing the release of its larger electric three-row SUV to transition to more compact EV alternatives.
To create the new platform, Ford assembled a tiny "skunk works team with some of the best EV engineers in the world." The crew is "filled with a lot of Tesla and Apple people."
"They are engineering a completely different approach, a different product at a different cost with a much smaller battery and different chemistry," Farley stated.
Photo: Haydon/Unsplash
