Ford\u2019s renewed investment into its electric vehicles has the potential to either breathe new life into a division hemorrhaging money from past failed endeavors, or be a death knell for the American auto brand, analysts warned.<\/p>\n
The auto company announced on Monday a $5 billion plan to invest in how it manufactures its EVs, including pouring $2 billion into transforming its Louisville, Ky., factory<\/a>\u2014which produced gas-powered cars for seven decades\u2014into an EV assembly plant. Ford will also rejig its production process to make its electric cars more affordable, targeting a medium, four-door pickup truck starting at $30,000. The truck will be available for purchase by 2027, with a larger model available beginning in 2028, the company said.\u00a0<\/p>\n At the foundation of Ford\u2019s new line of affordable cars is its new \u201cuniversal EV platform,\u201d which can produce higher-quality cars with less expensive parts, according to Ford CEO Jim Farley.<\/p>\n \u201cWe tore up the moving assembly line that you see here today, and we came up with a brand-new concept,\u201d Farley said at the company\u2019s Louisville factory on Monday. \u201cThis is the most radical redesign of how we manufacture cars since the Model T.\u201d<\/p>\n Analysts, however, are approaching Farley\u2019s lofty EV goals with caution, warning Ford will have to deliver on its promises to have a shot at overcoming billions of losses from its \u201cModel E\u201d EV division. It will have to compete with not only growing American competition but also the attention of consumers who have been hot and cold on EVs.<\/p>\n \u201cIf the vehicles don\u2019t appeal due to being EVs, then billions will be wasted,\u201d Morningstar equity strategist David Whiston told Fortune. \u201cThat\u2019s why you need a great product, great range, and lower battery cost and vehicle manufacturing techniques.\u201d<\/p>\n He added, \u201cThe challenge is, do you have a great product or not? [It\u2019s] hard to get excited about a vehicle you can\u2019t see yet.\u201d<\/p>\n Ford did not immediately respond to Fortune\u2019s request for comment.<\/p>\n Ford\u2019s Model E challenges<\/p>\n Ford has lost $12 billion from the division since the beginning of 2023, including $2.2 billion<\/a> in the first two quarters of this year. According to Whiston\u2019s models, the company is on track to lose $4 billion from its Model E division by the end of the year.<\/p>\n In 2021, Ford announced a charge toward an electric future, including plans to overhaul its European business and commitment to go nearly fully electric<\/a> on the continent by the end of the decade, as well as get 50% of total sales from EVs by 2030. The company rolled out the Mustang Mach-E and F-150 Lightning with initial success, but as the vehicles aged and Ford slashed production targets with no new models coming out, sales slowed<\/a>.<\/p>\n Meanwhile, American rival General Motors<\/a> capitalized on Ford\u2019s misfortunes, reporting last quarter a 111% increase in EV sales<\/a>, slotting itself right behind Tesla<\/a> as the No. 2 in the U.S. EV market.\u00a0<\/p>\n GM\u2019s sales were helped by the looming expiration<\/a> of an $7,500 EV tax credit in the U.S., which boosted EV demand, though appetite for the vehicles will likely wane after the tax credit expires at the end of September, Whiston said. Still, he calculated that excluding Tesla, overall EV sales are up 22% year over year through July 2025. With Cadillac and Hyundai<\/a> rolling out fresh models, there\u2019s decent hope for future EV demand.<\/p>\n Updating Henry Ford\u2019s vision<\/p>\n Ford\u2019s answer to its past manufacturing woes is a three-pronged \u201cassembly tree\u201d rather than its singular assembly line modernized by the company\u2019s eponymous founder<\/a>. Roger Atkins, founder of EV consultancy Electric Vehicles Outlook, called this new manufacturing method\u2014through which three more specialized manufacturing lines will eventually converge into one\u2014\u201carguably the first and only departure ever from Henry Ford\u2019s original vision.\u201d He posited that with a successfully updated manufacturing plan, Ford could make good on its failed promises from half a decade ago, though the risks are high.<\/p>\n \u201cEV progress is exponential, so a strategy five years ago that may have disappointed is in an entirely different global context today,\u201d Atkins told Fortune in an email. \u201cIf it does fail, it could be terminal for the brand.\u201d<\/p>\n Farley said the company is working to break the cycles it has encountered in the past<\/a> of \u201cidle plants, laid-off workers, and red ink.\u201d He is well aware of the perils associated with pouring more money into the Model E with little revenue to show for it thus far.\u00a0\u00a0<\/p>\n \u201cWe are doing so many new things I can\u2019t tell you with 100% certainty that it will all go just right,\u201d he said.\n<\/p>\n