This move comes as China's automakers continue to expand globally, posing a threat to Ford's market share.

While Farley did not provide many details about the upcoming vehicle, he mentioned that it is being developed by a specialized team within Ford known as the "skunkworks." The primary competitors for this affordable electric vehicle are anticipated to be Chinese automakers such as BYD and a forthcoming entry-level car from leading U.S. electric vehicle manufacturer, Tesla.

In a departure from Ford's traditional focus on trucks and SUVs, Farley emphasized the imperative of shifting towards smaller electric vehicles. He stated that larger all-electric trucks and SUVs are unlikely to generate profits due to their high costs, particularly the expensive battery packs required for significant ranges. Farley firmly stated, "These big, huge, enormous EVs, they're never going to make money. The battery is $50,000.... The batteries will never be affordable."

A Ford spokesperson later clarified that Farley's comments pertained specifically to large vehicles like the Super Duty models. This distinction emphasizes that Ford's current all-electric F-150 Lightning pickup and upcoming next-generation electric vehicles are not included in this assessment.

The decision to prioritize smaller, more affordable EVs aligns with Ford's strategy of capital allocation. The company recently announced the postponement of production for a large three-row SUV until 2027. Additionally, a next-generation pickup, codenamed "T3," was rescheduled from late 2025 to 2026.

Despite Ford's EV unit reporting a loss of $1.32 billion in the first quarter of this year, Farley emphasized the importance of producing profitable electric vehicles within the next five years. He expressed concern that if Ford fails to achieve profitability, competing Chinese automakers, who already dominate the global market, will further solidify their position. Farley warned, "If we don't make profitable EVs in the next five years, what is the future? We will just shrink into North America."

Furthermore, Farley suggested that a shift in consumer preference towards smaller vehicles is crucial for both society and the adoption of electric vehicles. This statement is surprising given Ford's historical reliance on truck sales, which have contributed significantly to the company's overall profits.

As Ford endeavors to regain market share and compete against Chinese automakers, the upcoming introduction of an affordable, profitable electric vehicle marks a pivotal moment for the company. The next two and a half years will be crucial as Ford seeks to capitalize on the growing demand for electric vehicles while addressing the challenges associated with profitability.