Ford set to lose $4.5 billion on electric vehicles this year, despite increased revenue
Ford Motor Company has recently divulged that it is expected to incur an astonishing loss of $4.5 billion due to electric vehicles (EVs) in the current year. This figure is higher than the previous estimate of a $3 billion loss.
On Thursday, the U.S. automaker unveiled its financial performance for the second quarter. As per Fortune's report, the electric vehicle sector of Ford, known as "Ford Model e," has incurred a significant loss of $1.8 billion year-to-date.
The estimated loss of $4.5 billion is more than double the $2.1 billion loss experienced by Model e in 2022. The company has recently declared a decrease in the cost of their electric F-150 Lightning pickup trucks, attributing it to the availability of more affordable battery materials.
The company claimed that its affordable electric vehicle (EV) prices "solidify its position as a frontrunner in the upcoming generation of EVs" and stated that the profit from the Ford Model e has increased by 39%. Additionally, Ford has plans to manufacture 600,000 EVs annually by 2024.
Ford plans to construct a battery manufacturing facility worth $3.5 billion in Michigan, a project that the governor of Virginia previously declined.
PICTURE - A Ford symbol is displayed at a car store in Springfield, Pennsylvania, on Tuesday, April 26, 2022. Ford will announce their financial performance on Tuesday, May 2, 2023. (AP Photo/Matt Rourke) (AP Photo/Matt Rourke / AP Newsroom)
According to Ford CEO Farley's recent statement, the rate at which electric vehicles (EVs) will be adopted in the short term will be slightly slower than anticipated. However, this is actually advantageous for companies like Ford that have already entered the market early. Farley mentioned that customers who opt for EVs tend to be loyal to specific brands, and Ford has been successful in attracting a large number of them with their initial products. Additionally, Ford is actively investing in improving their capabilities and increasing their capacity worldwide. While competitors are still trying to catch up, Ford has exciting plans for the future. They are currently working on next-generation products that are being developed from scratch and are expected to impress people with their advanced features and capabilities.
The business continues to bring in a considerable sum of money in various sectors. Ford's earnings during the second three-month period were $45 billion, resulting in a profit of $1.9 billion.
Ford Slashes Costs on F-150 Lightning Pickup Trucks
The electric version of Ford Motor Company's F-150 truck, known as the Lightning model, is currently in the process of being manufactured at their Rouge Electric Vehicle Center in Dearborn, Michigan. This production line is responsible for creating the futuristic vehicle. A photo captured on September 8, 2022, by JEFF KOWALSKY/AFP via Getty Images showcases the upcoming electric F-150 Lightning in its production environment.
Ford Model e is a new electric vehicle (EV) venture operating under Ford's umbrella, revealed Ford's Chief Financial Officer (CFO) John Lawler during a March press briefing. Lawler acknowledged the widely known fact that EV startups tend to incur losses as they allocate funds towards enhancing their capabilities, acquiring knowledge, increasing production quantity, and securing a larger market share.
Ford is set to reveal its financial performance for the third quarter of 2023 on October 26th.
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ROMULUS, MI - FEBRUARY 13: Jim Farley, the Chief Executive Officer of Ford, affectionately taps a Ford F-150 Lightning pickup truck before revealing during a media briefing that Ford Motor Company will form a partnership with Contemporary Am, a massive battery company headquartered in China (Bill Pugliano/Getty Images / Getty Images)
Fox Business contacted Ford for a comment, but they have not received a response.
This report received contributions from Gary Gastelu of Fox Business.
