Ford CFO John Lawler has reiterated that the automaker is still projecting a loss of "between $5.5bn to $5bn" for its Model E division in 2024, but insists that the firm's EV arm "must stand up on its own", led by an upcoming generation of vehicles built on a small skateboard platform.
"We do not believe the game is going to be really fought with larger vehicles. I think it is going to be in the smaller, more affordable vehicles," the CFO said at a Bank of America event yesterday, reaffirming the company's announcement from its Q4 results call.
This shift to small vehicles has been the motivation behind Ford's recently revealed 'Skunkworks' team in California, which has been working on a third-generation EV platform for two years.
The project "allow us to have that low-cost affordable EV platform where we can create multiple top hats off of that," Lawler says, indicating that Ford will leverage an adaptable skateboard platform as the starting point for a number of small vehicles – an approach similar to that of European OEM Stellantis.
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But Lawler reveals that, while the 'Skunkworks' platform – which he says is Ford's "Gen-2A" rather than "Gen-3" – will be the basis for multiple vehicles, its core function is to offer a small SUV comparable to the company's Explorer model.
"You could probably do the footprint of Explorer with the interior of an Expedition," he says.
Lawler's comparison suggests that Ford is looking to combine a small platform with a deceptively large interior, in accordance with the preferences of the American auto market.
Lawler says this strategy can answer Bank of America analyst John Murphy's criticism that:
"Americans, whether it be an EV, a diesel, a 4-cylinder, whatever it may be, don't like small vehicles. And [Ford's] business is predicated on these unbelievably great large trucks."
Lawler insists that Ford is confident it can meet a wide variety of consumer needs in a market dominated by large cars, saying that the 'Skunkworks' platform is allowing it "to create a platform that we believe is going to be able to cover a large segment of the population and give them the needs through different top hats on that platform."
Underlying the new approach is a fundamental rethink about profitability models in the automotive industry, Lawler says, as he argues that smaller batteries hold the key to profitable EV production for Ford.
"In the conventional internal combustion business, the larger the vehicle, the more margin there was, because the cost to add from the size is much less than the value of the consumer, right, the margin utility of the vehicle, the third row, the ability to tow more, ability to haul more. And so the margin goes up," he says. "It is the exact opposite of EVs because the bigger the vehicle, the bigger the battery."
Before the 'Skunkworks' platform Ford will launch its second-generation platform.
Despite the optimism around small EVs, management has said it will offer a large pickup on that platform first.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
