Stealthy Ford ‘Skunkworks’ Group Creating Affordable Electric Vehicle to Outperform Tesla and China

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Tesla transitioned from a luxury electric car manufacturer to a mainstream auto company with the success of Model 3 and Model Y. These two electric vehicles altered the landscape, compelling traditional automakers to hasten the production of affordable electric cars. Ford took action by recruiting a key engineer from Tesla and building a specialized team around them. During an earnings call, Ford’s CEO Jim Farley revealed that they have established an internal startup focused on developing a cost-effective EV.

Alan Clarke, who spent over a decade at Tesla, joined Ford in 2022. He played a pivotal role in bringing the Model 3 to market, a success story that Farley aims to replicate.

“Two years ago, we made a silent wager,” Farley informed investors during the conference. “We assembled a highly skilled skunkworks team to develop a budget-friendly EV platform. It comprised a select group of top EV engineers globally, operating independently from the main Ford company. It operated akin to a startup.”

Ford plans to make the largest ever U.S. investment in electric vehicles at one time by any automotive manufacturer and, together with its partner, SK Innovation, plans to invest $11.4 billion and create nearly 11,000 new jobs at the Tennessee and Kentucky mega-sites, strengthening local communities and building on Ford’s position as America’s leading employer of hourly autoworkers. CEO Jim Farley pictured.

TechCrunch indicates that this team includes engineers from Auto Motive Power, an expert EV energy management firm acquired by Ford in November 2023. Situated in Irvine, California—not Dearborn—the team is spearheaded by AMP founder, Anil Paryani, a significant member of Clarke’s group. Interestingly, Paryani and Clarke coincidentally worked at Tesla together for approximately five years.

Currently, Ford’s most economical EV is the base Mustang Mach-E Select, starting at $44,795 before any rebates. The objective is to introduce a battery-powered vehicle at a notably lower price point to directly compete with Tesla. For comparison, Tesla’s RWD Model 3 starts at $40,380.

“Our entire EV teams are laser-focused on cost efficiency in our EV offerings, as our main competition will be the budget-friendly Tesla and Chinese automakers,” stated Farley.

Simultaneously, Ford is significantly reducing F-150 Lightning production. The electric pickup truck initially had a price of $41,669—lower than the current price of the Mustang Mach-E—although pricing fluctuations occurred due to supply chain issues and production delays. While the base F-150 Lightning Pro once peaked at $61,869, it has now stabilized at $54,995. Demand has decreased since the truck’s initial release, prompting Ford to adjust manufacturing volumes.

Ford is reliant on its electric division, known as “Model e,” to bolster profits following a $526 million loss in the fourth quarter, compared to $1.3 billion in earnings during the same period in 2022. The company attributes this loss not to EVs but to restructuring overseas operations and employee pension plans. Notably, the Model e segment generated $1.6 billion in revenue in Q4.

For Ford, a truly mainstream EV could propel their financials to new heights in an ideal scenario.

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