On Ford’s earnings call Thursday, CEO Jim Farley mentioned the automaker’s next generation of electric vehicles, including a full-size pickup EV, is well underway. Ford’s new EVs will ride on an updated electric architecture built for the modern era.
Despite delivering a disappointing fourth-quarter and full-year 2022 earnings report yesterday, Ford is looking forward to a “pivotal year” in 2023 as it executes its Ford+ plan.
Electric vehicles were a bright spot for Ford last year, selling 61,575 models in 2022 (+126% YOY), making it the second largest EV maker in the US, behind only Tesla. The F-150 Lightning is sold out, the E-Transit cargo van is the best-selling electric van, and the Mustang Mach-E was one of the best-selling electric vehicles in the US last year overall.
However, as Farley alluded to on the company’s Q4 earnings call, a lot was left on the table. Around $2 billion could have been avoided due to production costs and ongoing supply chain issues.
As Ford transforms its business for the modern electric era, there will be parts moving slower than they should, which can incrementally add up.
For example, Ford has ramped up production of the F-150 Lightning at its Rouge EV center in Dearborn, Michigan, all year. With low production levels and high input costs, Ford must streamline production.
In the fourth quarter, Ford hit a run rate of 14,000 EVs, but to hit its goal of 50,000 per month by the end of 2023 and two million annually by 2026, the company is planning an overhaul for its second generation of EVs.
Ford is developing a new electric platform and EV pickup
In January, a report suggested Ford was developing its own in-house EV architecture by engineers in the US as it moved away from Volkswagens MEB platform in Europe.
On Thursday’s earnings call with analysts, Farley confirmed these developments, saying:
We are deep in the development of our second- generation EVs, including our next-generation electric full-size pickup.
These EVs will be fully software-updatable. That means a brand-new electric architecture, and they’re going to be radically simplified. Imagine three body styles, each with volume potential of up to 1 million units and just a handful of orderable combinations.
As a result, Ford expects higher customer satisfaction, material savings, and lower manufacturing costs.
When asked if Ford could sell a $40,000 electric crossover with a 20% gross margin, Farley responded by saying the company has learned a lot over the past year that will be implemented in its next-generation EV technology.
Farley gave a few examples, including the wiring harness for the Mach-E was 1.6 kilometers longer than it needed, and it was also 70 pounds heavier, which is worth $300 a battery. In addition, he admitted the company underinvested in braking technology to save on battery size and that industry-leading aerodynamics could lead to a smaller battery.
All of this, Ford will incorporate into its second-generation EV models and new platform, including its next-generation full-size electric pickup truck.
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