Ford hopes new model will bring high profits

Mr. Farley did not reveal many details about the car, but said the main competitors are expected to be Chinese automakers such as BYD and a model from US EV leader Tesla.

Mr. Farley said Americans need to "fall back in love" with small cars instead of big cars.

It will be important for Ford to produce profitable EVs in the next five years, as Chinese automakers continue to expand globally, Farley said.

Mr. Farley said Ford is for the first time focusing on smaller EVs instead of the all-electric trucks and sport utility vehicles (SUVs) that are the company's main source of profit.

He said drastic changes are needed to make EVs profitable. The first step is to put all the capital into smaller, more affordable EVs. Big cars are not profitable when battery prices are as high as $50,000.

Earlier this year, Ford said it would delay production of its large SUV at a plant in Canada until 2027, instead of the original plan of 2025. It also pushed back production of its next-generation “T3” pickup truck from late 2025 to 2026.

Ford's EV division lost $1.32 billion in the first quarter of 2024 on 10,000 vehicles sold.

In early April 2024, Ford delayed plans to launch a three-row electric vehicle in Canada and a next-generation electric pickup truck built in Tennessee. Executives said Ford’s next-generation electric vehicles will not be launched until they are profitable.

While electric vehicle sales are growing modestly, traditional automakers are still suffering from higher costs in the supply chain required to produce those vehicles.

CEO Jim Farley said he has scaled back some of the company’s electric vehicle ambitions to better align with consumer demand. Going forward, hybrids are a top priority for Ford as it moves customers toward a battery-powered future.

The automaker is also shifting its focus to larger electric trucks and SUVs, as well as smaller, affordable electric vehicles being developed by its “skunkworks” team in California.

Ford's strong commercial business has helped boost profits, and the automaker is betting on software-related services within the unit to boost profits in the coming years.

Ford reported adjusted quarterly earnings of 49 cents a share for the quarter ended March 31, compared with 63 cents a share a year earlier. Analysts on average expected Ford to report adjusted earnings of 40 cents a share, according to LSEG data.

The surge in hybrid sales is part of Ford's focus on the technology. Demand for hybrids is growing, while electric vehicles like the F-150 Lightning pickup truck and Mustang Mach-E crossover are selling more slowly than expected.

Ford said it is reducing production of its F-150 Lightning electric pickup truck as it expects weaker demand for electric vehicles in 2024.

Ford expects global electric vehicle sales to continue growing in 2024, albeit at a slower pace than expected. F-150 Lightning sales were up 55% in 2023, with further growth forecast this year, according to Ford.

The auto industry has pulled back on previous targets due to forecasts of slower electric vehicle growth in the coming years.

American consumers remain wary of these vehicles, in part due to cost, as well as concerns about charging on longer trips, along with the slow rollout of national charging facilities.

Automotive research firm Edmunds predicts that electric vehicles will account for 8% of sales in the US by 2024, up from 6.9% in 2023.

Industry data shows foreign automakers are increasing exports from China, the world’s largest auto market, as their market share in the country is lost to local rivals. Foreign automakers are expected to account for more than 20% of China’s total vehicle exports by 2023.