Ford Motor expects to introduce a $30,000 all-electric automobile that might be worthwhile in roughly two and a half years, CEO Jim Farley mentioned Friday in the course of the Aspen Concepts Competition.

Farley didn’t launch many different particulars in regards to the automobile, which is being developed by a Ford “skunkworks” workforce, however mentioned its important opponents are anticipated to be Chinese language automakers akin to BYD and an anticipated entry-level automotive from U.S. EV chief Tesla.

Farley mentioned Ford is first specializing in smaller EVs as a substitute of bigger all-electric vehicles and SUVs, which have traditionally been gas-powered revenue engines for the corporate, as a result of such autos are “by no means going to make cash.”

“It’s important to make a radical change as an [automaker] to get to a worthwhile EV. The very first thing we now have to do is basically put all of our capital towards smaller, extra reasonably priced EVs,” Farley mentioned throughout an interview with CNBC’s Julia Boorstin. “That is the obligation cycle that we have now discovered that actually matches. These massive, large, monumental EVs, they’re by no means going to make cash. The battery is $50,000. … The batteries won’t ever be reasonably priced.”

A Ford spokesman later clarified Farley was referring to giant autos akin to the corporate’s Tremendous Responsibility fashions or autos that require huge battery packs to attain important EV ranges of 500 miles. He was not referring to ones akin to Ford’s present all-electric F-150 Lightning pickup or next-generation EVs.

Ford earlier this yr mentioned it was suspending manufacturing of a big three-row SUV at a plant in Canada to 2027 from its preliminary plan of 2025. It additionally postponed a next-generation pickup, codenamed “T3,” from late 2025 to 2026.

Farley on Friday reiterated Ford’s next-generation autos could be worthwhile.

He additionally mentioned People have to “get again in love” with small vehicles as a substitute of bigger ones, a stunning assertion given a majority or Ford’s earnings come from vehicles and contemplating American carmakers have traditionally had bother making a living on small fashions.

“We’ve to begin to get again in love with smaller autos. It is tremendous vital for our society and for EV adoption,” Farley mentioned Friday. “We’re simply in love with these monster autos, and I like them too, but it surely’s a significant problem with weight.”

Ford’s EV unit misplaced $1.32 billion in the course of the first quarter of this yr on 10,000 autos wholesaled. Whereas the unit additionally contains EV-related enterprise akin to software program, these losses equate to a lack of $132,000 per automobile the unit sells.

Farley mentioned it’s essential for Ford to make worthwhile EVs within the subsequent 5 years as Chinese language automakers proceed to broaden globally.

“If we can’t make cash on EVs, we now have opponents who’ve the biggest market on this planet, who already dominate globally, already organising their provide chain around the globe,” he mentioned. “And if we do not make worthwhile EVs within the subsequent 5 years, what’s the future? We’ll simply shrink into North America.”