Skunk Works and Ford's Quest for Low-Cost Electric Vehicles

How to build an electric vehicle and innovate along the way

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‘‘Freedom to take risks—and fail—define the heart of a Skunk Works operation.’’

― Ben R. Rich, Skunk Works: A Personal Memoir of My Years of Lockheed

It recently came to light that Ford has its own Skunk Works team dedicated to developing a low-cost electric vehicle platform. CEO Jim Farley revealed: ‘‘We developed a super-talented Skunk Works team to create a low-cost EV platform. It was a small group, some of the best EV engineers in the world, separate from the Ford mothership. It was a start-up.’’ Ford's willingness to publicly discuss this secretive project suggests they are achieving promising results.

This is not surprising, given that a Skunk Works team is known for hardcore engineering and aggressively minimizing bureaucratic overhead to focus on a technical challenge. The term "Skunk Works" refers to a small, autonomous team within a larger organization that operates with minimal bureaucracy.¹ This allows them to concentrate solely on a highly secretive technical project. The Manhattan Project, which developed the atomic bomb, is a famous historical example of a Skunk Works operation.

Skunk Works originated as an alias for Lockheed Martin's Advanced Development Programs. Under the leadership of engineer Kelly Johnson, Skunk Works teams made significant contributions to U.S. wartime efforts, developing advanced aircraft like the P-80 Shooting Star, the first American jet fighter. It is also responsible for many of the highly advanced airplanes of today such as F-22 Raptor (Figure 1) and F-35 Lightning II.²

Figure 1. Lockheed Martin’s F-22 Raptor, the product of Skunk Works principles. Source: Flickr

Skunk Works Principles

Kelly Johnson established several key principles for managing innovative projects. Here are some of the most important rules he emphasized:

1. Complete Control: The Skunk Works manager must have full control over the program and should report directly to a division president or higher.

2. Small Teams: The project team should be kept small. Johnson believed that using a limited number of skilled engineers (around 20% of what is typical) is more effective.

3. Trust and Communication: There must be mutual trust among team members, along with close cooperation and daily communication.

4. Minimized Reporting: The number of reports should be kept to a minimum, but all critical work must still be documented.

5. Cost Management: Continuous and up-to-date reviews of costs are essential. Funding should be timely to avoid delays in the project.

6. Clear Goals: There should be a specific and clear project goal, with well-defined specifications for the end product.

7. Reward Performance: Team members who perform well should be compensated accordingly.

These principles highlight the importance of small, efficient teams that are fully committed to solving technical challenges. Johnson recognized that larger teams often face inefficiencies due to unnecessary meetings, miscommunication, and interpersonal conflicts. His focus was on creating streamlined processes that enable teams to work effectively and achieve their objectives.

Ford’s Skunk Works Mission

The craze over electric vehicles in recent years was mainly driven by early adopters: those willing to accept certain inconveniences of EVs, such as high cost and slow charging times, to have the latest technology. However, if the majority is to switch to electric vehicles, these inconveniences are no longer tolerable. In fact, electric vehicles are usually around €10,000 more expensive than their gasoline equivalents, mostly due to the high cost of batteries.

Ford has decided to tackle the problem of low-cost electric vehicles head-on.³ This challenge can be broken down into three sub-problems:

1. Reducing Battery Costs: Ford is likely to opt for a variation of phosphate-based cathodes (i.e., lithium iron phosphate or lithium manganese iron phosphate) in their batteries. A well-designed battery pack with these cathodes can rival the energy density of the more common lithium nickel manganese cobalt oxide batteries at 70% of the latter's cost. Notably, the Tesla Model 3 already uses lithium iron phosphate cathodes.

2. Leveraging a Flexible EV Platform: developing common vehicle components, or modules, that can be shared across different vehicle models (Figure 2). This flexibility is advantageous for lowering the costs and shortening development cycles, possibly offering a larger variation of models. It is akin to Lego pieces, where a small number of pieces can produce a large number of toys.

3. Making Smaller EVs Attractive: the paradigm of what an electric vehicle is must be changed. Removing internal combustion engine and adding batteries, changes the layout of the vehicle so much that there is space to re-imagine what an EV actually is and make it more attractive than gasoline counterparts, from the ease of use (e.g. charging time) to aesthetics.

Figure 2. Renault’s CMF modular platform. Source: Wards Auto

Clearly, Ford needs top-notch experts in all areas of engineering to achieve its goal of developing affordable electric vehicles. By the beginning of 2024, its Skunk Works team consisted of around 100 employees, a number that has now swelled to over 300. Ford has actively recruited talent from Tesla, Rivian, Lucid, Canoo, Joby, Hyundai, and Apple, among others.

Ford’s Skunk Works team is led by engineer Alan Clarke, who previously worked on Tesla’s Model Y. Another notable addition is an engineer who was part of Tesla’s Gigacasting team. Additionally, the Apple engineers who joined are likely from Apple’s canceled electric car project, known as Project Titan. Ford also brought eVTOL talent from industry leaders such as Hyundai’s Supernal.

Curiously, Ford's Skunk Works team was founded by acquiring Auto Motive Power, an electric vehicle charging startup that developed various technologies such as North American Charging Standard (NACS)-compliant and bi-directional on-board chargers as part of a complete energy management system. The system includes all power electronics as well as fast charging up to 500 A.⁴

Ford CEO explained that the team is “engineering a completely different approach, a different product at a different cost with a much smaller battery and different chemistry”. What does this indicate? It suggests that Ford is placing the battery at the center of its new design; they are not simply converting a gasoline-powered car into an electric vehicle. By acquiring a fast-charging startup like Auto Motive Power, Ford has adopted a battery-first approach, which is essential for electric vehicles. This is confirmed by their acquisitions of engineers from the eVTOL industry, where battery power density is the kingmaker.

Moreover, back in 2019, Ford expressed interest in using Rivian’s skateboard platform to develop electric vehicles. Hiring Rivian engineers likely indicates their intention to build an EV platform similar to Rivian’s. Indeed, patents reveal a modular vehicle platform that could support a variety of vehicles, ranging from passenger cars to small trucks (Figure 3).

Figure 3. Figure from Ford’s patent. Source: USPTO

Such a platform will ultimately simplify electric vehicle production while adding the flexibility needed to adapt to rapidly evolving market trends. This is crucial, especially considering that Chinese automakers like BYD have leveraged their extreme vertical integration to disrupt global markets with high-quality, low-cost EVs. This vertical integration is an advantage that Western automakers are acutely aware of. For instance, Tesla is currently working to produce its own batteries, while Volkswagen is establishing a foothold in the battery industry through its PowerCo subsidiary. Ford has expressed interest in producing batteries through joint ventures with various suppliers, such as CATL, SK Innovation, and Solid Power.

Odds of Success

The good news is that Ford is focusing on the affordable electric vehicle segment and aims to establish a strong presence in this market. Unlike Lucid, which produces luxury EVs with the aim of generating revenue for developing cheaper models, Ford plans to rely on its legacy vehicle sales.

The company has assembled a top-tier talent pool and freed them from bureaucratic overhead to re-imagine the concept of an electric vehicle and how it can be manufactured. This Skunk Works approach appears to be paying off, as the team has tripled in size within six months, suggesting that a minimum viable product has been achieved internally.

Which leaves us with the execution. How well can Ford execute at scale? If history is our witness, they can do it very well.

That’s all for now. Until next time 🔋!

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1. Lockheed Martin based its Skunk Works name on the "Skonk Works" from the Li'l Abner comic strip. The Skonk Works is depicted as a dilapidated factory from which toxic fumes of "skonk oil" emanate. The name was adopted because the Lockheed Martin team worked in a building where the strong smell from a nearby plastic factory was so overwhelming that engineer Irv Culver began answering the phone with "Skonk Works." Once the name gained recognition, management changed "Skonk" to "Skunk" to avoid any copyright infringement.

2. Interestingly, in 1955, the CIA commissioned Kelly Johnson to build a secret military airbase in Nevada, now commonly known as Area 51.

3. Several automotive companies, including Volkswagen, are fully committed to bringing low-cost electric vehicles to market—something that Chinese manufacturers have already accomplished.

4. Auto Motive Power utilizes silicon carbide (SiC) metal oxide semiconductor field-effect transistors (MOSFETs). Compared to pure silicon, SiC offers better thermal conductivity, allowing for improved heat dissipation and more stable operating temperatures. This means that less cooling is required, making SiC MOSFETs an excellent choice for applications where compactness is crucial, such as in automotive applications.