Ford’s EVs to Incur Over $3 Billion Losses
Ford Motor Company’s EV Losses Exceed Expectations
The Ford Motor Company’s losses in the electric vehicle (EV) sector are surpassing even their own conservative estimates.
Initial predictions indicated that the company would lose up to $3 billion on EVs in 2023.
However, a recent news release reveals that this figure has now ballooned to a staggering $4.5 billion.
The report highlights the company’s positive strides in EV revenues, with the hybrid Ford Blue generating $2.3 billion before interest and taxes.
Overall, Ford Model e, the company’s EV division, has experienced a 39% increase in revenue compared to the previous year.
“For its transparent, customer-centered business units, Ford now expects full-year [earnings before interest and taxes]… To be a loss of about $4.5 billion for Ford Model e, reflecting the pricing environment, disciplined investments in new products and capacity, and other costs,” the release states.
In response to these losses, Ford has already made adjustments, such as reducing prices on some of its EVs, including the F-150 Lightning electric pickup truck.
While this situation is not necessarily catastrophic for the company, Ford anticipates that revenues will continue to grow slowly until the EV division becomes profitable.
According to the release, Ford CEO Farley said, “[W]hile others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away.”
Nevertheless, the increase in projected losses from $3 billion to $4.5 billion within a few months is significant.
Only time will reveal whether Ford’s optimism in its EV division will pay off.
Looking ahead, the policies of the Biden administration may play a crucial role in mitigating Ford Model e’s losses.
In late 2021, the administration announced plans to cease government purchases of gas-powered vehicles by 2035.
Considering the government buys approximately 50,000 vehicles annually and owns over 650,000, this transition aligns with Ford’s goal of selling more EVs.
By 2030, Ford aims for EVs to comprise roughly half of all their sales, according to The New York Times.
For more information, read the full article here.
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