Ford Invests $5 Billion in Affordable EV Platform to Challenge Chinese Automakers’ Dominance
According to Bloomberg on Monday (11th), Ford Motor (F-US) announced a $5 billion investment to develop a new "universal EV platform," launching an affordable electric vehicle lineup in an attempt to penetrate the mass market amid ongoing losses in its EV business and compete head-to-head with Chinese EV giants like BYD (01211-HK) and Geely.
These will be Ford’s first fully electric models designed from scratch, set to debut starting in 2027. The first vehicle will be a midsize pickup priced around $30,000, followed by crossover SUVs and ride-hailing-compatible models priced under $40,000—about $10,000 below the average price of new cars in the U.S. CEO Jim Farley called this a "historic moment" for the company since the Model T era, stressing that a complete overhaul of engineering, supply chains, and manufacturing processes is necessary to compete with Chinese automakers in the global EV market.
Ford will spend $2 billion to retool its Louisville, Kentucky plant, halting production of the gas-powered Escape SUV to manufacture next-gen EVs. The new models will adopt a high-efficiency production architecture designed by a California-based R&D team led by former Tesla (TSLA-US) executive Alan Clarke, cutting assembly time by 40% and requiring 600 fewer workers than the Escape. The plant will employ 2,200 hourly workers—a reduction of 600 from current levels.
The vehicles will use lithium iron phosphate (LFP) batteries produced at a new $3 billion Michigan battery plant slated for 2025, offering lower costs and more spacious interiors while featuring advanced capabilities like hands-free driving.
Despite shifting toward compact and affordable models, Ford still plans to release a successor to the F-150 Lightning full-size electric pickup, though its launch has been delayed from late 2027 to mid-2028. Production will take place at a new $5.6 billion facility in Stanton, Tennessee—Ford’s first new assembly plant in half a century, with an annual capacity exceeding 300,000 units. However, amid uncertain demand, full utilization plans remain undecided, potentially including longer-range plug-in hybrids.
Ford’s EV division lost $5.1 billion last year, with losses expected to widen this year. Farley emphasized that the new EVs must achieve affordability and profitability in their first year to attract mainstream buyers deterred by high prices.
However, Ford’s expansion faces pressure from former U.S. President Trump’s anti-EV mandate policies. His $3.4 trillion fiscal plan scrapped the $7,500 consumer tax credit per EV and nearly cut manufacturing subsidies critical to the Michigan battery plant. Ford lobbied heavily to preserve the subsidies, with Executive Chair Bill Ford personally advocating. Additionally, Trump’s tariffs added $800 million to Ford’s Q2 costs, with a projected annual impact of $2 billion—despite Ford being the highest-volume automaker in the U.S.
