Ford is one of several automakers that has dialed back its electric-vehicle plans in recent years amid an uneven market and headaches with getting batteries built at scale. But that doesn’t mean it’s backing off entirely.
The Blue Oval is still working the game from behind the curtain with a cheap EV platform on the horizon. Its benchmark: China. And the goalpost is cost-parity.
Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. In today’s edition, Ford says its affordable EV won’t just be cheap, it’ll cost the same to build as China’s top hits.
Plus, Tesla is reportedly pausing Model Y and Cybertruck lines again and seven Chinese automakers say they’ll have models with 100% domestically-produced chips in 2026. Let’s jump in.
30%: Ford Says It’ll Match China’s EV Costs
Photo by: Ford
If you can’t beat ’em, build it like ’em. That’s the attitude Ford’s Skunk Works team—aka the Advanced Electric Vehicle Program—has taken when it comes to the automaker’s not-so-secret affordable EV project.
That project is now up to 500 employees at three different locations, so you could say that things are getting a bit serious. But the most important thing of all? The project is going all-in on matching China’s costs to build EVs.
According to Axios, which cites a “candid dinner discussion” with Ford’s Vice President of EV Programs, Lisa Drake, the automaker is coming out swinging with its low-cost EV platform. Not only is the project taking direct aim at overall vehicle cost, but it’ll also be responsible for multiple different vehicle segments. Eight, to be specific, including pickups, crossovers, and—you’re not ready for this one—maybe even sedans.
See, I told you that you weren’t ready. Ford hasn’t sold a sedan in the States since it pulled the plug on the Ford Fusion after 2019. But, as Drake’s comments inferred, Ford is ready for some change, and that starts with its EVs.
The first product built on the affordable EV platform will be a mid-sized pickup and is due in 2027. That’s something we already knew, and was also the first time that CEO Jim Farley hinted at the same cost-parity goal that Drake reportedly told dinner-goers. The truck will also use prismatic LFP batteries developed alongside CATL, but that hinges on things staying on track in Washington.
Here’s what Daniel Roeska, Bernstein’s lead automotive analyst who hosted the dinner, wrote in a note following the event:
Lisa Drake was explicit: Ford intends to match the cost structure of leading Chinese players. That means not just battery pricing, but full system cost from chassis and thermal systems to inverters and electronics
With eight body styles and potential global applicability, it’s intended to underpin Ford’s EV strategy for much of the next decade.
Basically, if it’s going in the car, it’s getting cheaper and lighter. I can imagine that in order to make this happen, pennies are being pinched so tightly at Ford’s engineering offices that each cubicle might soon be able to double as one of those novelty coin presses you see on vacation.
It’s admittedly kind of wild to see Ford go full-tilt on EVs like this while other automakers are slowly backing down on the American market. And Ford itself has been no exception there; while it was an early challenger to Tesla with the Mustang Mach-E and F-150 Lightning, it has since cancelled a three-row electric SUV and punted other EV plans down the road.
But if Ford can pull off this Skunk Works project, it could be the reversal of the century.
Will it work? Well, that depends. If Ford can thread the needle between cost-effective and cheap, then there’s a good chance that the Blue Oval can make it happen. Most importantly, if it’s successful, Ford will set itself up with a fleet of cars that aren’t just competitive, but strategically—and very intentionally—global.
60%: Tesla To Pause Model Y, Cybertruck Production For A Week (Again)
For the second time in less than two months, Tesla is reportedly telling its employees to take a week off around an American holiday.
The last time the automaker did this was on Memorial Day, but it’s not like Tesla suddenly moved to Texas and became so patriotic that it began to observe week-long holidays. Instead, the extended shutdown of its production lines could be something more telling of a demand problem.
According to Business Insider, Tesla has informed employees that it will enact a week-long production pause for both the Cybertruck and Model Y at its factory in Austin, Texas. The shutdown is set to begin on June 30th and will extend through Independence Day.
Here’s what Business Insider knows:
In a meeting earlier this month with workers, the company said the shutdown would begin the week of June 30, and production would resume the following week, according to a person familiar with the matter. During the pause, employees can use paid time off or come in for voluntary training and cleaning.
The pause would enable the automaker to perform maintenance on production lines, the company told workers.
Tesla told staff the improvements would help ramp up production, according to the person. It did not specify which lines could see increased output.
The last time this happened, an employee remarked that a week-long pause was “unusually long” for Tesla to shut down its lines. It’s also worth noting that factory employees have reported reduced overtime hours and inconsistent work schedules. Some have even claimed that they were sent home from the factory early multiple times this year.
This is the third occurrence of Tesla pausing its production lines since December. Tesla also reduced the output of the Cybertruck line in April after it was clear that production capacity far outpaced the anticipated demand of the stainless steel truck. Tesla has also been facing a stagnant inventory of its trucks, thanks to weak sales. Reports have circulated that the automaker has been sitting on more than a quarter’s worth of unsold inventory, which could explain the pause.
What about the Model Y, though? Well, that’s a bit more complicated. Tesla is still facing an excess inventory issue with the Model Y, however, there could be a legitimate reason for the pause as well. Tesla reportedly plans to begin production of its affordable vehicle later this month.
According to Tesla execs, the car “will resemble in form and shape” existing cars, meaning that Tesla could use the downtime to retool the line with minor changes needed for that vehicle.
90%: Chinese Automakers Are Kicking Foreign Chips Out Of Their EVs—And Fast
Photo by: Geely
With the U.S. forcing protectionist measures on the entire auto industry over the last six months, I’ll admit that it has crossed my mind how difficult it would be to replace entire supply chains. In short, it’s something I figured was nearly impossible to do in any short amount of time. Apparently, China is out to prove me wrong.
A new report by Nikkei outlines just how quickly Chinese automakers are evicting foreign semiconductors from upcoming EVs. Brands are moving from regional and global supply chains to fully home-grown and vertically-integrated solutions. And they’re doing it really, really fast. In fact, 7 brands have pledged to have models out as early as next year that have fully domesticated the production of basically anything made from silicon.
Here’s Nikkei outlining the specifics:
Chinese automakers including SAIC Motor, Changan, Great Wall Motor, BYD, Li Auto and Geely, are preparing to launch models equipped with 100% homemade chips, with at least two brands aiming to start mass production as early as 2026, Nikkei Asia has learned.
The first of these models to be mass-produced will be the newest versions of existing lines made by a few brands, with more makers to follow, according to people familiar with the situation. These efforts are part of Beijing’s ambitious vision for increasing the country’s self-reliance in chips amid intensifying tensions with the U.S.
The project is shepherded by China’s Ministry of Industry and Information Technology (MIIT), which regularly calls on automakers, particularly the state-owned ones, to conduct self-assessments of their domestic chip adoption rates, the people said. The latest policy target is to use 100% self-developed and made automotive chips by 2027, three people briefed on the matter said. This is a significant acceleration of the government’s previous target of having domestic automakers using 25% homemade chips this year
This isn’t the first that we’ve heard of China moving production inward. Just last year, when the Biden administration tightened exports of powerful compute hardware needed for Artificial Intelligence automated driving computers, Chinese automakers doubled down on building their own inference chips and self-driving stacks.
Now, the brands are moving forward with producing all of their silicon within the borders of China at lightning speed. In fact, automotive chips have previously needed to go through rigorous environmental testing that could take between three and five years from the time the chips entered development until they reached the final QC stage for production. Automakers are now taking a more whitebox approach by using off-the-shelf chips in some solutions like infotainment systems, and more custom approaches in others. Either way, it’s sped up the process needed to eject anything not made in China.
“We are required to replace not only driver ICs with China-made chips, but also some components and materials, such as optical films that are currently dominated by U.S. companies,” an executive of one Chinese supplier told Nikkei. “We have to switch them to Chinese suppliers by next year at the earliest.”
BYD, Changan, Geely, Great Wall Motor, Li Auto and SAIC Motor have all pledged to have models with 100% homemade chips. Two of the brands will be ready to launch a model as early as next year.
100%: Should Ford Bring An Electric Sedan To The States?
Photo by: InsideEVs
Hear me out. Ford’s coming in hot with a plan to build uber-affordable EVs, and I’m here for it. I want Ford to be successful because I want EVs to succeed. To do that, we need to have cost-effective options and brands need to make smart financial decisions.
Obviously, they have a better idea of their market than the Average Joe on the street. They spend the big bucks in R&D to assess the climate of the consumer market—and the word on the street is that America is finally becoming stuffed on its insatiable appetite for crossovers. So when Lisa Drake said that Ford’s new EV platform could potentially be used for a sedan, you’d imagine how quickly my ears perked up.
Would it be a smart move for Ford to launch a new sedan after almost a decade of crossovers and pickups dominating sales? Or could Ford be risking it all by dipping back into a market it left behind years ago? Let me know your thoughts in the comments.
