At Ford’s recent Capital Market Day event, executives gathered to discuss their next major electric vehicle release and the future of the EV market. Among the announcements was the upcoming release of a new explorer-sized, 3-row SUV that has been described by CEO Jim Farley as “a seven-seat SUV that’s like your own personal bullet train.” With an EPA battery life of 560km, the SUV is set to be released in 2025.
Farley emphasized the importance of customer experience in the EV market, stating that direct sales and reduced distribution costs will help improve the shopping experience for EV customers. He also stressed the need to focus on loyalty and community building rather than expensive advertising campaigns.
The Blue Oval’s going all in on EVs, looking to shake off their reputation for “low margins, weak growth and low valuations,” as Farley put it. Part of the plan is overhauling their customer experience for EV buyers. Ford will sell this mysterious 3-row EV directly to customers, cutting out dealers and keeping more of that sweet EV profit for themselves.
“We don’t have to spend an extra $500 on TV ads,” Farley said. Ford wants to “focus on loyalty, customer communication, building community” instead of massive ad campaigns. They’re also working to cut costs across the board, from simpler vehicle designs to a more stable supply chain. The upcoming F-150 Lightning electric truck will cost 30% less to build than a regular F-150, for example.
Ford is working to reduce costs in all aspects of production, including design complexity and factory costs. By simplifying the design of the Explorer, for example, Ford is able to reduce costs by up to $7 million per year. Overall, the company has identified $5 billion in annualized savings.
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One of the biggest challenges facing the EV market is efficiency. Ford’s Chief Senior Product Development and Technology Officer, Doug Field, noted that “pushing bigger and bigger batteries into big electric cars and trying to make them look like internal combustion engine cars is a big challenge.” He added that “the real battleground for electrification is efficiency. This obsession with electric vehicles isn’t just engineering. It’s like a religion.”
Field expects online sales will help dealerships while reducing excess inventory and discounts. Ford’s betting big on software and services too, with 600,000 subscribers already paying for stuff like BlueCruise hands-free driving tech. That’s bringing in an extra $200 million per year and growing.
The Blue Oval’s hidden secret weapon? Their commercial vehicle business, Ford Pro, which Farley says will generate $10 billion in revenue next year, almost double what Ford made from it last year. “Trying to do everything for all customers is not a good business model,” Farley said. Ford’s sharpening their focus, and it’s paying off.
“It’s hard to describe to someone outside Ford how much this team wants to win,” Farley said. The next few years will be crucial, but as Farley put it, “The time period to really watch Ford is 2025, when we’re going to do some really big things.” The future’s electric, and Ford wants to lead the charge.