Ford CEO Jim Farley recently shared that the automaker has plans to produce a three-row seven-seat electric SUV. The Blue Oval is on a mission to chase Tesla and stand out from the crowd of brands trying to get customers to buy into their EV lineups.
Ford is arguably making wise choices when it comes to building a future of successful EVs. Not long ago, most EVs were small, polarizing, and impractical. Once compelling options started coming to market and Farley took the reigns at Ford, the company launched an all-electric Mustang crossover and the F-150 Lightning, its first fully electric pickup truck.
Even rival CEO Elon Musk has complimented Ford and Farley on a few occasions over the years, reminding us that Tesla and Ford are the only two US automakers to never file bankruptcy. Much more recently, Musk replied to a tweet with the following positive words about Ford:
At any rate, Ford's Farley is obviously well aware of the fact that there are still segments that need to be populated with EVs. There's a solid chance that automakers that populate those segments with compelling options sooner rather than later will see a great benefit.
Farley explained to analysts during Ford's Q1 2023 earnings that there's already become an overabundance of two-row electric SUVs on the market. Moreover, many more are coming soon. Ford estimates there will be 45 two-row electric SUVs on the market by 2025.
With so many choices, most companies aren't going to see huge sales success in the segment, especially with Tesla dominating it by leaps and bounds. Farley said via Autocar:
“We could see the overcapacity in the two-row electric utility segment years ago."
“In contrast to two-row crossovers that we believe will be a very saturated market, we believe Model E can be highly differentiated in markets where we know the customer well, like the three-row utility space."
Farley went on to say that Ford's goal is also to lure in new customers. He noted that many of the folks who bought the F-150 Lightning electric truck had never previously owned a truck. He believes the same situation could unfold with a three-row electric SUV from the company.
Ford's popular Mustang Mach-E electric crossover is a direct competitor with the Tesla Model Y, though the Ford is seeing a drop in sales. Ford lowered the price after weak numbers in the first quarter. While the Mach-E and Model Y are about the same size, you can't get the Ford with a third row of seats.
Farley said the automaker plans to further cut costs on the Mach-E by the end of this year. He admitted that Ford would simply remove $5,000 from the crossover's materials, much like Tesla has done in the past. He explained:
“If they're not using something that we have on the vehicle, we can design that out."
Unfortunately, a seven-seat electric SUV is going to be a very expensive venture for Ford, and it will most certainly lose money, at least initially. However, it should pay off in the end. Farley says Ford's EVs will see an 8% profit margin by 2026 thanks in part to its second-gen platform. The CEO concluded:
“We've redone all of our platforms, completely changed the engineering. What you will see is a vehicle with half the labour content but radical simplicity."