Ford has made clear its aim to take on Tesla and BYD by launching cheap electric cars

Is this news to anyone? It is known that the car industry is in a race to move to electric. Given the vast saving for the end line consumer, the huge reduction in pollution, and the fact that many countries have already set dates where combustion engine car sales will be banned, surely the response to this news is ” why have you not made this move before?

What is clear, is that ford is developing a smaller and cheaper EV platform. Well this is great, but everyone is trying to create small affordable electric cars.

Now, how many of these small cars is ford aiming to sell? Currently, ford makes a $28,000 loss on each electric cars. Which means that they need to bring this down, or 2 million electric cars sold my ford would cause a huge loss.

Tesla is making progress on their own cheap model Рthe so called tesla model 2. This is aimed to hit the target of $25,000, or around £18,000, and they are expecting to make millions of this model, which does not seem unreasonable.

We need to remember, that while we look on ford as an old car company (and they are) at the current moment, they are not bigger than tesla. So in 2023 tesla sold 1.81 million vehicles, all electric, while ford sold 1.99 million, however only 72,000 of these were electric. If in the future, only electric cars count, then perhaps we should already be looking at ford as the minnow in a pond with a huge shark that is tesla. If we look at profit, this might make this clearer, Ford made profits of $4.3 billion, while Tesla made profits of 15 billion.

So, is Ford a tiny electric car maker, or not? Is it going to become one of the most profitable electric car makers, or is it going to become a small car maker? Time will tell, however, the problem is that the 2 million small electric cars that ford says its is targeting, is also the same number that Tesla is going to be targeting. Can the world demand sustain 2 million from each? Possibly, in the future, but Ford may well find that diving into the pond of small Electric cars is a hard place to make money, and finding enough demand for 2 million electric cars may well prove to be the harder part of the transition.

Time will tell, but they certainly have their work cut out for them.

Leave a Reply

Your email address will not be published. Required fields are marked *

See Animals Wild