Ford CEO Jim Farley announced in a recent earnings call the existence of a "super-talented skunkworks team" dedicated to the development of a new low-cost electric vehicle (EV) platform.
Operating as a "startup" outside of Ford's traditional structure for the past two years, this team, composed of “some of the best EV engineers in the world”, has been laser-focused on developing a more cost-effective EV architecture that is expected to underpin a wider variety of models.
The challenge of affordable EVs
The main driving force behind this initiative is the pursuit of affordability.
Farley emphasised that while EV buyers tend to remain loyal once they've made the switch, the high up-front costs have been a major barrier to broader adoption.
"Affordable Teslas and Chinese OEMs" were identified by Farley as the primary competitors in this space, highlighting the urgent need for more profitable alternatives.
This endeavour is particularly timely, considering the pricing landscape in New Zealand. For instance, Tesla's Model Y ($67,900) is currently priced several thousand dollars lower than Ford's Mustang Mach-E ($74,990).
Despite the higher price tags, Ford's electric offerings have yet to turn a profit, with the company reporting a loss of US$4.7 billion (NZ$7.7 billion) on EVs in 2023.
A profit-driven future
Farley's strategy for the new platform extends beyond mere vehicle sales. He foresees it as "a large install base for software and services."
In North America, Ford already offers services like the BlueCruise hands-free driving system for a monthly payment, and its Ford Pro division, focusing on fleet and work trucks, has seen significant growth in software subscriptions.
With the upcoming generation of EVs slated for release in 2026, Ford is clearly aiming to leverage software and subscription services as a key profit avenue.
Implications for consumers
For car buyers, this shift could have mixed implications. On one hand, the promise of more affordable EVs is certainly appealing.
On the other, the potential increase in subscription-based services might not sit well with those who prefer a one-off payment model, especially for much-needed safety features.
Still, Ford's new EV platform represents a significant step towards making its EVs more accessible to a broader market.
While the focus on software and services might raise some eyebrows, it's an interesting approach that could redefine the way we think about vehicle ownership and usage in the electric age.