Currently reading: Report: Ford goes after Tesla Model 2 with £20,000 EV in 2026
Ex-Tesla Model Y engineer is heading up development of Ford's crucial new entry electric car

The first car from Ford’s “skunkworks” electric car engineering team will be a $25,000 (£19,700) crossover, according to a new report.

Financial publication Bloomberg said it will be positioned as a direct rival to Tesla’s long-awaited mass-market model, known as the ‘Model 2’, which is tipped to cost €25,000 (£21,400).

The new Ford will launch with a lithium-iron-phosphate (LFP) battery, said to be 30% cheaper than a traditional lithium ion pack. The company will also consider other battery technologies to cut costs further. It is possible that Ford could employ sodium ion batteries, for example, which are being evaluated by the likes of Stellantis and the Renault Group for their cost-effectiveness.

The small electric crossover will be followed by a similarly sized pick-up and a car for ride-hailing services, according to Bloomberg. The publication added that these models' development is being led by Alan Clarke, who was previously in charge of engineering the Tesla Model Y.

Ford CEO Jim Farley revealed last month that Ford is working on an affordable EV platform and admitted that most buyers are unwilling to pay over the odds to go electric.

He added that the firm made the decision to assemble a “skunkworks” team two years ago, having been “too optimistic” about interest in premium models due to the availability of cheap credit pre-Covid and the pent-up demand for all cars amid the semiconductor chip crisis.

This drove a “temporary spike in supply” and Ford struggled to find buyers for the cars it had built as it realised that – after the early EV adopters were on board – mainstream buyers were not prepared to pay a premium to go electric.

“As the Covid shock retreated, we learned that as you scale EVs to 5000-7000 units a month and you move into the [majority of customers], they are not willing to pay a significant premium for EVs,” said Farley.

Ford is not alone in adjusting its electrification strategy to better appeal to the mainstream market. Renault has stolen a march on the class with the £25,000 Renault 5, which will soon be rivalled by the Citroën ë-C3 and Volkswagen ID 2.

Both Renault and Volkswagen have announced plans to enter even smaller segments with a new Twingo and the ID 1 respectively, each priced at around £17,000. Media reports suggest the two firms could share development of a platform to reinforce the business case for these models.

Charlie Martin

Charlie Martin Autocar
Title: Editorial Assistant, Autocar

As a reporter, Charlie plays a key role in setting the news agenda for the automotive industry. He joined Autocar in July 2022 after a nine-month stint as an apprentice with sister publication, What Car?. He's previously contributed to The Intercooler, and placed second in Hagerty’s 2019 Young Writer competition with a MG Metro 6R4 feature

He is the proud owner of a Fiat Panda 100HP, and hopes to one day add a lightweight sports car like a Caterham Seven or a Lotus Elise S1 to his collection.

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ianp55 20 March 2024

Is this really likely to happen? Ford charge nearly £44k for the Mustang Mach E yet insist that they can only make a profit from it by building in China & Mexico, so how are the Blue Oval going to going to make money on a car costing well under half this. The delayed Explorer some how has to come between these two cars and that's using VAG technology, if this small car does emerge it'll likely be an ID2 with a Ford badge and a few styling tweaks

xxxx 20 March 2024

Ford you make me laugh, you've made one 44k bev, you dropped the Ka, Fiesta, Focus and Mondeo with no direct replacement and lastly had to resort to rebadging VW BEVs.

Now you think you can rival the Model 2 within 2 years, no chance.