Ford (F) CEO Jim Farley says US buyers aren’t interested in $75,000 electric vehicles — and the automaker doesn’t want to keep living in Tesla’s (TSLA) shadow.
“We’ve learned … people are not willing to pay [a] $30,000 premium for that big battery on a [$50,000], $60,000 utility,” Farley told Yahoo Finance at Ford’s Accelerate Pro conference in Detroit, Mich. “But they’re willing to buy a $30,000 EV if they save $2,000 a year compared to gas costs.”
Farley’s comments underscore the challenges Ford faces as it pushes further into EVs. While global EV demand grows, price sensitivity is shaping which models will succeed.
The CEO said the automaker has been “No. 2 to Tesla for three years” and is taking lessons from that experience to better align with consumer demand.
Ford is also rethinking its EV strategy and benchmarking against BYD, China’s EV leader. In 2024, BYD reported annual revenue of $107 billion, surpassing Tesla’s $97.7 billion.
“[BYD has] full support from the Chinese government … they’ve been at this for 20 years,” he said, adding the company has “a lot of good” intellectual property.
“Ford has to innovate, to catch up with BYD because we’re a global company,” Farley said. “We’re going to compete with them around the world.”
He emphasized that electrification is accelerating abroad, and the US is just one part of a worldwide market. Part of those innovation efforts comes in the form of a new “universal electric vehicle platform” aimed at affordability. Farley said the goal is a $30,000 EV that appeals to mainstream buyers while maintaining competitive performance and features.
“… We had to reload our capital on what we learned, move as fast as we can, and then we’ve got to make sure we’re future-proof to BYD,” he added.
He compared the industry’s adoption of electrification to the way technology has transformed other sectors. “Anytime there’s new technology … things changed,” he said, pointing to how Apple’s iPhone reshaped mobile devices and disrupted legacy companies like Motorola.
Analysts note that Ford’s approach aligns with broader market realities. In a note to clients, JPMorgan analyst Ryan Brinkman highlighted that while EV demand is growing, minimizing “EV-related losses going forward” remains a critical factor for adoption.
Goldman Sachs analyst Mark Delaney wrote that “the degree of success with company specific initiatives such as the transition to hybrids/EVs” is a key factor of the firm’s Neutral rating on the stock.