Ford CEO Bets on Affordable Models Amid Success of Inexpensive Chinese EVs

Jim Farley, CEO of automaking giant Ford, is reportedly looking to develop and offer more affordable electric vehicles, stating that their next-gen EVs will both be profitable and affordable.

The CEO's sentiments come as Chinese EV makers' inexpensive models have proven successful overseas.

Farley claims Ford's following electric vehicle lineup will compete with the best available. In an interview, Farley stated that China's strategic wager on electric vehicles has "paid off so far," and Ford is attempting to duplicate some of the success on US territory.

Earlier this year, Farley disclosed that Ford was "secretly" developing a smaller EV architecture to support more reasonably priced cars. In addition, Ford is delaying its larger three-row electric SUV in favor of the smaller EV models.

According to Farley, Ford assembled a small Skunkworks team comprised of some of the world's top EV engineers to develop the new platform. A large number of Tesla and Apple employees are allegedly on the team.

Farley said the company's engineering strategy is entirely different, the can result in a more affordable device with a smaller battery and different chemistry.

Chinese EV Makers' Success

Ford's CEO made his comments at the same time that BYD Co., the top producer of electric vehicles in China, was drawing attention for its outstanding sales figures in May, which were the result of significant price cuts. The business almost broke a new sales record, demonstrating its increasing dominance in the new energy vehicles (NEVs) market.

BYD sold 331,817 NEVs in May, a 5% increase from 313,245 units in April and a 38% YoY increase. These NEVs include plug-in hybrid electric vehicles (PHEVs) and electric cars (EVs). With this remarkable accomplishment, BYD is nearly breaking its record of 341,043 NEVs sold in December 2023, according to CNEVPost.

Continuing to break records, BYD's PHEV sales reached a record 184,093 units in May, representing a 22% year-over-year increase. For the third month in a row, PHEV sales have broken records.

Compared to the 507,862 PHEVs sold over the same period last year, BYD has sold 685,960 PHEVs this year, a 35% increase.

Sales of the company's fully electric vehicles are also increasing; in May, 146,395 units were sold, up 9% from April and 22% year over year. This increase comes after BYD introduced its more affordable "Honor" edition models to up the ante on internal combustion engine (ICE) vehicles earlier in the year.

Affordable Volkswagen EVs

Meanwhile, the German automotive behemoth Volkswagen has also declared its intention to create an affordable EV model to compete with the burgeoning EV industry, which is crowded with low-cost Chinese EV manufacturers.

Volkswagen wants to produce electric vehicles for around 20,000 euros ($21,746) for the European market. The company also announced plans for a global debut in 2027.

When Chinese rivals vying for market share challenge top European automakers, the project gets underway. Some competitors have a 30% cost advantage over their Western counterparts.

Volkswagen stated that a major part of the project's localization in Europe would be responsible for reducing emissions and component transportation routes.