Ford Motor expects to introduce a $30,000 all-electric car that will likely 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 car, which is being developed by a Ford “skunkworks” group, however mentioned its important rivals are anticipated to be Chinese language automakers similar to BYD and an anticipated entry-level automobile from U.S. EV chief Tesla.

Farley mentioned Ford is first specializing in smaller EVs as an alternative of bigger all-electric vans 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 earn money.”

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

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

Ford earlier this yr mentioned it was postponing production of a giant 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 can be worthwhile.

He additionally mentioned Individuals have to “get again in love” with small vehicles as an alternative of bigger ones, a shocking assertion given a majority or Ford’s income come from vans 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 concern with weight.”

Ford’s EV unit lost $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 similar to software program, these losses equate to a lack of $132,000 per car the unit sells.

Farley mentioned it is essential for Ford to make worthwhile EVs within the subsequent 5 years, as Chinese language automakers proceed to increase globally.

“If we can not earn money on EVs, now we have rivals 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.”