Ford's CEO said on Tuesday's earnings call that the company created a "skunk works" laboratory two years ago with the mission of developing affordable electric vehicles. The team is reportedly led by Alan Clarke, who worked at Tesla for 12 years before joining Ford as executive director of advanced electric vehicle development.
Ford, like other automakers around the world, is working to perfect a profitable formula for electric vehicles. The company's Model unit, which is responsible for electric vehicles and software products, reported a loss of $1.6 billion in the final quarter of 2023. Ford said it would slow its investment in electric vehicles to better meet customer demand.
But the revelation of an "underground factory" lab working on low-cost electric vehicles proves that Ford remains determined to compete with Tesla and other automakers in the field.
"Two years ago, we made a silent bet," Ford CEO Jim Farley said on an earnings call with investors. "We assembled a team of talented stooges to build a low-cost electric vehicle platform. It was a small team with some of the best electric vehicle engineers in the world, and it was separate from parent company Ford. It was a startup."
The team, based in Irvine, Calif., is made up of engineers from AutoMotive Power, or AMP, an energy management startup Ford acquired last year. According to the media report, AMP founder Anil Paryani currently serves as executive director of engineering at Ford and has overlapped with Clark's work at Tesla for several years.
Farley said Clark and his team have developed a "flexible platform that can not only be deployed on multiple types of vehicles, but will also provide a large installed base for software and services, and what we're seeing now is [Ford's] Pro's commercial services division."
He added that Ford aims to compete with Chinese automakers such as Tesla, which is developing its own low-cost electric vehicles, and BYD, which has successfully sold millions of affordable plug-in cars around the world.
But these cars won't be coming anytime soon. The Skunk Works team is likely developing Ford's third generation of electric vehicles. These models will be launched after Ford's second generation (electric trucks and three-row SUVs). They are expected to enter production at the Blue Oval campus in Tennessee in 2025. Ideally, these vehicles will be profitable "within the first 12 months after launch."
Hybrid vehicles will also play an "increasingly important role" in Ford's future, he said. The company's hybrid sales are up 20% in 2023, and Farley said he expects sales to grow 40% in 2024.
Ford has scaled back some of its electric vehicle plans as demand for its plug-in vehicles slows and some dealers object to the costly infrastructure changes required to sell them. The company said it would delay $12 billion in investments, including a planned battery factory in Kentucky.