In an interview with Ward’s Auto, recently-appointed CEO of Ford, Jim Farley, said that they aren’t planning to make any EVs that cost over $100,000, as well as trying to deal with some seriously massive warranty costs that have eaten into profits over the last few years.
Farley did not announce the cost of their upcoming electric F-150, but stated that it wouldn’t crack the $100,000 limit. One wonders what kind of lifestyle would consider “less than six digits” as being cheap, but I guess it’s a start, and Farley didn’t say how much less it would be. Considering that Fiat’s upcoming EV will be less than £20,000, the bracket for what’s considered cheap in the electric market is drastically changing.
It seems like as the EV market expands over the years, the companies involved are beginning to pick one of two sides – either providing cheap vehicles en masse, or creating high-cost megacars that aspire to be silver batmobiles. Neither approach is wrong, but it feels pretty clear that substantial environmental, societal and technological change will mainly be impacted by the former group. Ford seems to be aiming for that same group, though frankly it needs to go a lot lower than a tenth of a million dollars before it can be considered “affordable.” Right now the cheapest option for a Ford EV is the Mustang Mach-E, which is a so-so $43,995. It’s not hugely expensive (at least by the standards of cars), but it’s hardly cheap either.
Notably, Farley also admitted that warranty costs had been a serious bugbear. “Our warranty coverages in the last few years is up $1 billion to $2 billion depending on the year, and that is not okay,” Farley said. “So, although it moderated in the (third) quarter and we have taken a lot of actions on craftsmanship, long-term durability, we have a much bigger ambition to improve the quality of our vehicles. We have taken a lot of countermeasures. They will take time.”
For those who don’t speak fluent corporate, warranty costs are the expenses needed to repair and replace a product. When somebody buys a Ford car and it breaks before the warranty runs out, the company will begrudgingly pay to have it sorted. Ford having to shell out such enormous amounts of cash suggests that the quality of manufacturing that goes into their cars is not ideal for anybody. Planned obsolescence is one thing, but unplanned obsolescence is quite another.