At the Aspen Ideas Festival on Friday, Ford CEO Jim Farley announced that the company plans to launch a $30,000 all-electric vehicle that will be profitable in about two and a half years.

Farley provided limited additional details about the vehicle, which is being developed by a specialized team within Ford. He said its main competitors will be Chinese automakers such as BYD and a planned entry-level electric car from Tesla, the leading U.S. electric vehicle maker.

Farley said Ford is focusing on smaller electric vehicles rather than larger, all-electric trucks and SUVs, which have historically been the company’s main profit drivers. He said larger vehicles «will never be profitable.»

«To get a profitable electric vehicle, automakers have to make a significant shift. The first thing we have to do is put all our capital into smaller, more affordable EVs,» Farley said in an interview with CNBC’s Julia Boorstin. «These big, huge EVs are never going to be profitable. The battery alone costs $50,000… Batteries are never going to be affordable.»

A Ford spokesperson later clarified that Farley was referring to large vehicles like the company’s Super Duty models or vehicles that require massive battery packs to achieve significant 500-mile ranges. He was not referring to Ford’s current all-electric F-150 Lightning pickup or any next-generation EVs.

Earlier this year, Ford announced it would delay production of a large, three-row SUV at a plant in Canada to 2027, from its initial plan of 2025. It also pushed back its next-generation pickup truck, codenamed “T3,” from late 2025 to 2026.

Farley reiterated on Friday that Ford’s next-generation vehicles will be profitable.

He also said that Americans need to «fall in love again» with small cars instead of big ones, a surprising statement given that most of Ford’s profits come from trucks and that American automakers have always had a hard time making money with smaller models.

«We need to start loving smaller vehicles again. It’s very important for our society and for the adoption of electric vehicles,» Farley said Friday. «We love these monster vehicles, and I love them, but there’s a big problem with the weight.»

Ford’s EV unit lost $1.32 billion in the first quarter of this year on 10,000 vehicles sold wholesale. While the unit also includes EV-related businesses like software, those losses equate to a loss of $132,000 per vehicle sold by the unit.

Farley stressed the importance of Ford producing profitable electric vehicles over the next five years as Chinese automakers continue to expand globally.

«If we can’t make money on electric vehicles, we have competitors that have the largest market in the world, that already dominate globally, and that are already setting up their supply chain all over the world,» he said. «And if we don’t make profitable electric vehicles in the next five years, what’s the future? We’re going to be limited to North America.»