Ford says fleet buyers are receptive to large electric vehicles (EVs), but for vehicles aimed at private buyers – at least in the US – the business case is a lot harder to make.
“…For larger retail electric utilities, the economics are unresolvable,” said Ford CEO Jim Farley in a fourth-quarter earnings call.
“These customers have very demanding use cases for an electric vehicle. They tow, they go off road, they take long road trips.
“These vehicles have worse aerodynamics and they’re very heavy, which means very large and expensive batteries.
“Retail customers have shown that they will not pay any premium for these large EVs, making them a really tough business case given the expense in the batteries.”
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Ford’s cancelled three-row electric SUV
A Ford spokesperson clarified to InsideEVs that the Blue Oval CEO was referring to large SUVs.
The company had already cancelled plans in August 2024 to build upcoming electric three-row SUVs, which had previously been delayed.
It announced it planned to instead “leverage hybrid technologies for its next three-row SUVs”.
It also delayed a new electric pickup truck to 2027, and recently confirmed it was looking at employing extended-range electric vehicle (EREV) powertrains in larger vehicles like pickups.
EREVs feature an internal combustion engine (ICE), but this is used to charge the battery instead of powering the wheels directly. Rival Ram will soon launch its 1500 Ramcharger which employs this technology.
“People love hybrids for more than just fuel economy. And I think we see this in more degrees of hybrid and PHEVs as a solution for customers, EREV for certain kinds of vehicles, heavy vehicles that don’t tow and that pure EV for commercial are very affordable,” said Mr Farley.
“I don’t know if that makes sense to you, but that’s what I hear from the customers why they love these vehicles.”
There are a handful of large electric off-road SUVs already on the market, including the GMC Hummer EV and Rivian R1S. These will be joined over the next few years by models like the Jeep Recon and Scout Traveler.
But Ford appears to be focusing its efforts in the large EV space on vehicles aimed at commercial buyers. It already has the F-150 Lightning pickup and the E-Transit full-sized van to appeal to these buyers.
“For Ford, our commercial customers do show potential for large EVs,” said Mr Farley.
“They’re willing to pay a premium over ICE because they can really measure the [total cost of ownership] advantages of EV and they can live with depot charging. They don’t have the same range anxiety that retail customers have.”
Like companies such as Stellantis and BMW, Ford is investing in platforms that can support multiple types of powertrains. That includes both body-on-frame platforms, for vehicles such as pickups, as well as more car-like unibody platforms.
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F-150 Lightning and Mustang Mach-E
For private buyers, Ford says it’s “deep in the development” of new “affordable, high-volume” EVs.
“On the US retail side, the sweet spot that has emerged is small- and medium-sized trucks and utilities,” said Mr Farley.
“These vehicles’ use case fits perfectly for EVs, daily commuters, well suited as a second vehicle in the household.
“They require smaller, much lower-cost batteries. These vehicles can be offered at lower prices to help adoption of EVs for the customers who really appreciate their lower operating costs.”
Being developed by a “skunkworks” team in California, the first such vehicle is set to be a Ranger-sized ute due in 2027.
In the meantime, it’s expecting more red ink from its Model e EV division. After losing US$4.7 billion (~A$7.5bn) in 2023, it lost US$5.1 billion (~A$8.1bn) in 2024 and Ford expects a US$5.5 billion (~A$8.75bn) loss this year.
MORE: Ford to invest in range-extender EVs amid slump in pure-electric vehicle demand
