Ford’s All-Electric Midsize Pickup Is Hitting Its Cost Targets

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• CEO Jim Farley said Ford is shifting EV launches to help meet a previously stated goal of making all its new EVs profitable within 12 months of launch.

• Ford’s next generation of EVs, including a midsize pickup slated for 2028, will use lithium-iron phosphate batteries developed with Chinese partner CATL, with which Ford is building a plant in Michigan.

• Ford Blue has new derivatives of Bronco and Maverick scheduled for Q4 and an all-new Expedition and Lincoln Navigator coming next year. The company has found unexpected success with hybrids such as Maverick (pictured above).

The Ford skunkworks’ midsize electric pickup truck, scheduled for the 2028 model year, will match China’s BYD for costs, CEO Jim Farley told Wall Street analysts in the automaker’s third-quarter earnings on Monday.

Farley said Ford already has cut EV costs by $1 billion this year and has trimmed battery capacity by 35% “in line with where we think the market will be in a few years.”

Farley said Ford is shifting EV launches to help meet a previously stated goal of making all its new EVs profitable within 12 months of launch. Ford expects 150 new EV nameplates to enter the North American market by the end of 2026, putting even more pressure on electric-vehicle prices.

Ford’s next generation of EVs will use lithium-iron phosphate batteries developed with Chinese partner CATL, with which Ford is building a plant in Michigan.

“And we’re deep in the design and engineering of our next-generation vehicles,” Farley said. “Boy, are we excited about these coming out in the next few years. You know, in 40 years in the industry I’ve seen a lot of game-changer products, but the midsize electric pickup designed by our California team has got to be one of the most exciting.”

It will come with an “incredible package” and consumer technology for a segment Ford knows well, he said.

“It matches the cost structure of any Chinese manufacturer building in Mexico in the future,” Farley said, with obvious reference to BYD, which expects to have chosen a site for a Mexican plant with 150,000 units of annual capacity, according to Reuters. “How do we know that? Because 60% of the BOM has already been quoted,” he said, referring to the bill of materials for the midsize EV truck.

The pickup will be the first all-new EV on Ford’s third-generation electric platform to come from the skunkworks that Farley revealed in his fiscal 2023 earnings call last February. Lead engineer is Alan Clarke, who led engineering on the Model Y for Tesla.

Though one source said Ford will have the smallest EV pickup in the North American market, the Rivian R1T also slots into the “midsize” segment. The source said the midsize Ford EV truck will be priced somewhat higher than its previously rumored $25,000-$30,000.

Ford has yet to overcome price pressures on a quickly flooding EV market whose growth has slowed in the last year. Although Ford has cut Mustang Mach-e costs by $5,000 over 24 months, the company’s Model e business unit lost another $1.2 billion in earnings before income tax in the third quarter, for a $3.7 billion loss year-to-date.

Ford Blue’s EBIT for internal-combustion light vehicles was $1.6 billion, while the Ford Pro commercial truck unit made $1.8 billion EBIT.

Revenue of $46.2 billion for the three units combined rose 5%, with an adjusted EBIT of $2.6 billion, up 16%. This includes a $1billion write-off for Ford’s now canceled all-electric SUV.

The Dearborn, Michigan, automaker has adjusted full-year EBIT expectations to “about $10 billion” from a previous range of $10-12 billion, according to Chief Financial Officer John Lawler. Last year, Ford reported a $10.4 billion EBIT.

Volume of Ford’s Blue models, which includes hybrids, is down 2%, due to discontinued low-margin models, though revenue is up 3%. Recent hurricanes and productivity problems with a specific supplier have constrained production, Lawler said.

But the company has found unexpected success with its hybrid offerings.

“The other opportunity that kind of emerged that maybe we didn’t expect was the popularity of hybrids, especially on trucks,” Farley said. “We frankly can’t keep up with demand.”

“I think that has encouraged us to put hybrid across our whole lineup, and be more curious about other partial-electric solutions, which we’ll talk to you about.”

Ford Blue has new derivatives of the Bronco and Maverick scheduled for the fourth quarter of this year and an all-new Expedition and Lincoln Navigator coming next year.

But the Pro commercial business unit remains Ford’s brightest spot, with volume up 9% and revenue up 13%. Pro’s software sales are up 30% and will soon account for one-fifth the unit’s business, Farley said.

Which current Ford vehicles do you think lend themselves well to an expanded hybrid lineup? Please comment below.