Ford Is Working On An All-Electric Affordable Vehicle That'll Compete Directly With The Tesla Model 3 And Model Y

Good morning! It's Thursday, April 2, 2026, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, Ford CEO Jim Farley says the automaker is working on an affordable car to rival the Tesla Model Y and Model 3, an auto industry group wants the U.S. to drop an 18-cent gas tax, Mercedes-Benz isn't taking any sort of EV off-ramp and Hyundai is close to selling top-trim Palisades again.

The world of electric vehicles is murky at best right now, but that isn't stopping Ford and CEO Jim Farley — the $27 million man — from moving forward with a project meant to take on the mighty Tesla Model Y and Model 3. At this point, you're probably thinking to yourself, "wait, isn't the Mustang Mach-E a Model Y competitor?" Well, why don't you just shut up? This is apparently going to be an all-new car that'll run on Ford's UEV platform.

The Mach-E has always done fairly well when it comes to EV sales. In 2025, Ford sol 51,620 of the electric crossovers, which isn't bad. However, that number was dwarfed by the estimated 172,800 Model 3s and 317,800 Model Ys Tesla sold, according to Car and Driver. Obviously, Ford wants a bigger slice of the pie. From Ford Authority:

We'll have an all-electric, affordable vehicle to compete with Model Y and Model 3," Ford CEO Jim Farley said during a recent appearance on the Spike's Car Radio podcast.

[...]

These comments come a bit after the executive didn't rule out the return of a Ford sedan at some point in the future, one that he also said could be "a rear wheel drive performance, high performance affordable sedan," albeit, one that utilizes pure electric power and would potentially be underpinned by its Universal EV Platform.

As Ford Authority previously reported, the UEV platform can support up to eight body styles, including a compact crossover, mid-size crossover, a three-row crossover, pickup, cargo van, and passenger van. Ford's future UEV timeline reportedly consists of both two- and three-row SUVs, a subcompact and larger sedan, and a van, in addition to the mid-size pickup set to debut in 2027 for the 2028 model year.

Farley also spoke on the podcast about Ford's upcoming all-hybrid lineup (yes, that includes the Bronco) that'll include extended range electric vehicles for things like towing. Still, he says the company isn't giving up on EVs altogether, but it is focusing mainly on this hybrid pivot.

The head of a group that represents nearly every major automaker is calling on the federal government to suspend an 18.4-cent per gallon tax on gas. In its place, they want a vehicle fee to pay for road repairs. The Alliance for Automotive Innovation represents BMW, Bugatti, Ferrari, Ford, GM, Honda, Hyundai-Kia, Jaguar-Land Rover, Mazda, McLaren, Mercedes-Benz, Mitsubishi, Nissan, Porsche, Stellantis, Subaru, Toyota, VinFast, Volkswagen and Volvo, along with a slew of other suppliers. Its head, John Bozzella, said in a proposal that the government should address the increasing financial shortfalls in the highway trust fun by imposing a single fee on every vehicle based on weight.

As more folks buy electric vehicles and more fuel-efficient cars, the gas tax — which hasn't been raised since 1993 — hasn't been able to keep up with road repair requirements. Since it's not indexed for inflation, the tax has lost more than 60% of its value in real terms. From Reuters:

Bozzella said the fee would be collected like ​a registration fee. "This policy would guarantee every vehicle on the road contributes something to ​maintaining America's transportation network," Bozzella said. "Those driving older, less fuel-efficient vehicles or who travel long distances ‌bear ⁠the financial burden. That's not fair."

Since 2008, more than $275 billion – including $118 billion from the 2021 infrastructure law – has been shifted from the general fund to pay for road repairs.

Many Republicans want to impose a fee on electric vehicles to help pay for road ​repairs.

Last year, House Republicans ​proposed a new $250 ⁠annual fee on EVs and $100 for hybrid EVs but it was not included in a massive tax and spending bill. The current ​five-year surface transportation law expires on September 30.

Some states charge ​fees for ⁠EVs to cover road repair costs. Some Republican senators in February 2025 proposed a $1,000 tax on EVs for road repair costs.

Most revenue for federally funded road repairs is collected through ⁠diesel and ​gasoline taxes, which EVs do not pay.

While it does sound unfair that EV drivers get away with a comparable road repair tax, asking them to pay anywhere between $250 and $1,000 is pretty damn wild. The Electrification Coalition, an EV advocacy group, said that even $250 was unfair because the average gas-powered vehicle will cost its owner about $88 per year in federal gas taxes.

Mercedes-Benz is bucking the trend of automakers canceling their upcoming electric vehicles, so the German automaker still plans to deliver multiple EVs in the U.S. over the next three years. They include three AMGs, the electric GLC crossover and an electric E-Class sedan. It's an exciting time, I'll tell you what.

While I'm personally excited for these cars, I'm not sure the company totally is, as comments from its U.S. CEO make it sound more like the company has been hamstrung into building them at this point. It's why the automaker is adopting a far more mixed powertrain strategy for the U.S. than it otherwise would have, meaning it'll sell gas, hybrid and electric versions of the same cars. From Automotive News:

Mercedes-Benz USA CEO Adam Chamberlain said bailing on EVs is not an option given the stringent government mandates the automaker has to comply with overseas.

"There is no choice" globally, Chamberlain said, citing Europe's requirement that EVs account for half of vehicles sold by 2030 and China's 60 percent target.

Instead, Mercedes will adopt a pragmatic powertrain strategy in the U.S., where consumer interest has cooled following the elimination of a federal tax credit.

The automaker has competitively priced EVs but will not force the transition, Chamberlain said.

[...]

"Let the customers choose," the executive told Automotive News at an event here.

Some Americans still demand EVs despite the loss of federal incentives, Chamberlain said, though adoption is concentrated in pockets. Nationally, 14 percent of consumers say they would seriously consider an EV for their next vehicle, with interest rising to 28 percent in California, he said.

Mercedes says it expects EVs to account for about 5% of U.S. retail sales in 2026, but that's largely due to limited supply. It's currently maximizing production of the electric CLA and GLC to meet stronger demand in in Europe and China. Because of that strong demand, just 200 electric CLAs have reached our shores thus far, which is very annoying.

Hopefully that'll change soon, because the electric CLA is a real star of a little sedan.

Hyundai says its just days away from resuming sales of the Palisade Limited and Calligraphy. The automaker hit the two top trims of the three-row crossovers with a stop-sale last month after a two-year-old in Ohio was crushed to death by the Palisade's electric rear seat.

The toddler died when the second- and third-row power folding seats failed to detect her after the button to fold them was pressed. From Automotive News:

"First and foremost, our hearts and deepest sympathies go out to the family. It was a real tragedy in terms of what happened," Parker told reporters April 1 on the company's monthly sales call.

[...]

"We took quick action, issued an immediate stop-sale and recalled all of the units that were in operation. Within the next several days we are going to be issuing a technical service bulletin for the repair," Parker said. "We should be able to get power seats off stop sale within a matter of days, probably less than a week."

The recall included 68,500 2026 vehicles in the U.S. and Canada.

The partial stop-sale on a key vehicle like the Palisade was a large contributor to Hyundai's 3.4% March sales decline. Overall, Pali' sales were down 23% last month to 9,075 vehicles from 11,742 vehicles in February.

Kia has also recalled 568 examples of the Telluride — the Palisade's mechanical twin — for the same issue. All of them are hybrid SX Prestige and X-Line SX Prestige models, according to Edmunds.

History.com

On this day in 1992, mob boss John Gotti was convicted of murder. I'm not here to get into the whole "Teflon Don" thing or what it meant for organized crime when he went down. What I am here to talk about is that his conviction led to one of the best TV interviews/videos ever put on the internet.

I mean, it's hard to find a better interaction about a convicted killer than:

"He was the best guy around."

"What about the people he murdered?"

"What murdaaaa?????"

Lost in that interaction, though, is my favorite part of the video, which is the guy's buddy quietly adding "they say he murdered people." It's truly art.

Anyway, if you want to actually learn more about Gotti and this trial, head over to History.com.

Some of you doofuses probably thought President Trump's primetime address to the nation last night would help to ease fuel prices. Au contraire, mon frère. WTI oil futures have jumped nearly 10% in one day to about $110 per barrel, and it's a nearly identical story with Brent Crude prices, which are up about 8% and overing around $110.

All of this is to say that our march past the $4 per gallon rubicon is well underway, as the average price of a gallon of gas rose 2 cents overnight from $4.06 to $4.08, according to AAA. With the President saying we'll be stuck this war for at least "two or three weeks" and a lack of any real plan to repoen the Strait of Hormuz, I don't think things will change anytime soon.

If you were wondering, the last time gas was over $4.08 was back in August of 2022, according to data from the Energy Information Administration, and the average price of a gallon of gas is now up $1.10 — or about 31.2% — since the war first broke out on February 28, when it was $2.98.

Here's where national average prices stand right now, according to AAA:

AAA

Man, there are few songs out there that get me as hyped as "Rosalita" when they come on my playlist. The whole song is just so high-energy from start to finish, and Bruce flexing his "big advance" is just iconic. If you're feeling down today, just give this song a listen. You'll immediately feel better.