“While our Gen 2 EVs were targeting to deliver an EBIT margin comparable to ICE by 2026, the dynamic changes in the market, pricing, adoption rates, regulations are forcing us to further reduce the cost of our EVs.”

In context

“Let me be specific. Stunning performance like no truck has ever performed, building unexpected innovation for truck customers far beyond the normal truck attributes, a super flexible cabin that feels like a lounge or a tiny office. Take the wheels off this truck, and it’s still a mind-blowing product and a digital experience that totally is immersive and personalized. I’d take this truck seven days of the week over a Cybertruck. A great product is not enough in the EV business anymore. We have to be totally competitive on cost. Tesla actually gave us a huge gift with a laser-focus on cost and scaling the Model Y. They set the standard, and we are now making real progress on our second- and third-cycle EVs that are in the midst of being developed today as we get closer to the introduction. While our Gen 2 EVs were targeting to deliver an EBIT margin comparable to ICE by 2026, the dynamic changes in the market, pricing, adoption rates, regulations are forcing us to further reduce the cost of our EVs. The key levers to deliver this competitive cost structure are scaling, vertical integration, and batteries. So, let’s double-click on each of these three. On scaling, this is much more than building new facilities or scaling high-quality batteries or thermal propagation. We’re leveraging digital prognostic capabilities in our manufacturing lines to improve quality. We are also reducing complexity, and we are optimizing our vehicle design and engineering for manufacturability. Yep, we’re designing these vehicles for our manufacturing team. On vertical integration, this is the most fundamental change. We are insourcing batteries, inverters, scaling production of our drive units and gearboxes, and designing and producing unit castings in-house at Ford. In addition, on our next-generation uti”