Ford's 'Skunkworks' EV Project Includes $25,000 Truck, Compact SUV: Report

The first model is coming in 2026, and it will be powered by an LFP battery.

Ford Mustang Mach-E

Suvrat Kothari

By: Suvrat Kothari

Mar 18, 2024 at 5:52pm ET

Add InsideEVs as a preferred source in Google

Comment

The fear of affordable Chinese EVs entering the U.S. through Mexico has rattled American carmakers. But it seems like they are finally responding with some countermeasures to the potential onslaught of Chinese EVs.

Remember Ford’s announcement from last month about an internal “skunkworks” team developing a low-cost electric vehicle platform? Some new details have surfaced about this project. Bloomberg reported today, citing an anonymous source, that the new low-cost EV platform will spawn at least three new electric cars: a compact SUV, a small truck, and an EV designed for ride-hail services.

Get Fully Charged

The renewed urgency to build low-cost EVs in the U.S.

China's low-cost EVs have already entered several overseas markets, including Europe and South America. It could potentially be mayhem for the U.S. auto industry if they landed stateside—with local players risking losing business to cheap, well-made Chinese EVs. But some truly American low-cost EVs might finally be on their way.

Here’s what Bloomberg reported today:

Bloomberg Businessweek has learned that this team consists of fewer than 100 people working on a new electric platform to underpin a compact SUV, a small pickup, and, potentially, a vehicle that could be used for ride-hailing, according to one of the people. The first model will arrive in late 2026, starting around $25,000—matching the expected base price of a low-cost EV that Tesla is working on, the person said.

The report added that despite Ford losing as much as $5.5 billion per year on EVs, these new compact electrics must be profitable within a year of going to market—a huge task for the company but one that could easily define its future.

Not surprisingly, Ford’s small EV will be powered by lithium-iron-phosphate (LFP) cells. LFP batteries are generally cheaper to manufacture, have a longer life cycle, and pose fewer environmental and safety risks compared to nickel-manganese-cobalt (NMC) chemistries. However, LFP batteries aren’t as energy-dense as NMC packs. That’s why we typically see them on entry-level models like the standard range rear-wheel-drive Tesla Model 3 and the entry-level versions of the Mustang Mach-E. The Dearborn automaker is constructing an LFP battery plant in Michigan in partnership with CATL, the world's largest battery maker.

Ford is also exploring other battery technologies to further cut costs, the report said. This rounds out what Ford CEO Jim Farley said last month while announcing the low-cost EV platform. "All of our EV teams are ruthlessly focused on cost, and efficiency, in our EV products. The ultimate competition is going to be the affordable Tesla and the Chinese [automakers]," he said.

It makes sense for Ford to strike three different segments with one low-cost platform. The one-size-fits-all approach is pretty ubiquitous in the EV era. An electric compact SUV is a no-brainer and would drive sales volumes—Tesla is already working on a rumored $25,000 crossover, or what it internally calls the “Redwood” project. Kia is also said to be working on more affordable electric models like the EV3 and EV2. Any one of them could shake up the EV industry.

Get the InsideEvs Newsletter

back

Subscribe For more info, read our Privacy Policy & Terms of Use.

Moreover, with rideshare rules increasingly mandating drivers to adopt EVs to meet emissions goals, Ford might not want to leave the opportunity to capitalize on that.

This marks a stark contrast from Ford’s strategy just six years ago. In 2018, Ford deleted small cars from its U.S. portfolio to focus on high-profit margin trucks and SUVs. With EVs, the equation is entirely different. China’s BYD, which surpassed Tesla to become the world’s largest EV maker in 2023, is looking to set up a factory in Mexico, from where it could backdoor cheap EVs into North America. Local players could risk losing business and customers to them.

Currently, Chinese EVs are subject to a 27.5% import tariff and there’s bipartisan support to increase that tariff to 125%. But thanks to the U.S.-Mexico-Canada (USMCA) free trade agreement, cars made in Mexico are tariff-free.

Will the Ford EVs be good enough to take on Tesla and the potential onslaught of Chinese EVs? With China’s stranglehold on the battery supply chain, will they be priced competitively?

What do you think?

View

Comments

Those questions might remain unanswered for a while. But this certainly kicks off a presumably tough battle to build affordable small EVs through the decade.

Contact the author: suvrat.kothari@insideevs.com

More Ford news

Ford Killed Its Small Cars. Now It Says Small, Profitable EVs Are A Must