• Ford targets 5 million annual vehicle sales by 2032, a 20% increase, with five new sub-$40,000 models including the $28,350 Fathom EV pickup.
  • The Fathom launch is set for Q4 2027, with preorders opening in Q1 2027, but near-term profitability is expected to remain flat as Ford manages cost headwinds.
  • Ford's strategy hinges on affordable EVs, manufacturing simplification, and new revenue streams from software and battery storage, amid rising competition and uncertain EV demand.

A Pivot to Affordability

Ford Motor Co. is making a bold bet that affordability is the key to unlocking growth in the electric vehicle market. CEO Jim Farley has set a target of selling 5 million vehicles annually by 2032, roughly 20% above current volumes, according to people familiar with the matter. Central to that plan is a lineup of five new models priced below $40,000, including the highly anticipated Fathom electric pickup, which will start at $28,350—lower than the roughly $30,000 figure initially reported. The Fathom is slated to begin production in the fourth quarter of 2027, with preorders opening in the first quarter of 2027.

The Fathom is more than just another EV; it represents Ford's renewed focus on cost discipline and manufacturing efficiency. The vehicle will utilize large aluminum castings that replace 146 structural parts, simplifying production and reducing costs. Ford aims to generate over 100,000 first-year sales, though the actual ramp will be critical: 2028 will be the first full production year, so the late-2027 launch should not be mistaken for a full year of deliveries.

Financial Pressures and Guidance

The ambitious sales target comes as Ford navigates a mixed financial picture. In the third quarter, revenue dipped 2% year over year to $49.5 billion, and net income fell to $2.0 billion from $2.4 billion. However, adjusted EBIT rose 3% to $2.7 billion, and adjusted earnings per share of $0.49 beat consensus estimates of $0.41. Free cash flow also impressed at $4.7 billion.

Management raised the bottom end of its full-year adjusted EBIT guidance to $10.5 billion–$11 billion, up from $10 billion–$11 billion, while maintaining free cash flow guidance of $6 billion–$7 billion. Still, the company cautioned that 2027 earnings will likely be roughly in line with 2026, as it absorbs approximately $2 billion in additional commodity, memory, and logistics headwinds. "We're taking actions to fundamentally change the cost structure of our EVs," Farley said during a recent earnings call, according to a transcript.

The Road Ahead

Ford's strategy also leans on partnerships and non-vehicle revenue. The company is collaborating with Renault (RNO.PA) and Geely (0175.HK) on European vehicles to share development costs, and it has repurposed battery assets for stationary energy storage through Ford Energy, with customer agreements covering over 80% of intended 2028 capacity. Additionally, the Fathom will offer home backup power without a separate inverter, and Ford sees software and subscription services as future profit drivers.

Yet significant risks remain. Chinese competition is intensifying, particularly in Europe and Southeast Asia, and the expiration of U.S. federal EV tax credits means the Fathom must stand on its own pricing. Ford's Model e division posted a $1.1 billion EBIT loss in the third quarter on $1.2 billion in revenue, underscoring the challenge of achieving profitability in EVs. The company targets an 8% adjusted EBIT margin and Model e breakeven by 2029—goals that will require flawless execution of the Fathom launch and broader cost reductions.

Ford shares are down about 8.5% year-to-date, reflecting investor skepticism. The company's global deliveries fell 9% through September. Ford did not immediately respond to a request for comment on the sales target.

Clarification: An earlier version of this article misstated the Fathom's starting price. It is $28,350, not $30,000.