Ford Model e continues to lose billions of dollars

Ford's electric vehicle business posted losses of $1.3 billion in the first quarter of 2024. Turnover from the division fell by 84 per cent in the first three months of the year, which Ford justifies with "industrywide pricing pressure [that] continued to affect electric vehicles currently on the market."

Sales of the Ford Model e division did by no means fall as sharply as turnover; on the contrary. With 20,233 vehicles, Ford Model e sold 86 per cent more electric vehicles YoY, with all-electric Ford models achieving double-digit and, in some cases, even triple-digit growth rates. Broken down by model, the Ford Mustang Mach-e achieved 9,589 units, the F-150 Lightning 7,743 vehicles and the light commercial vehicle division, Ford Pro, contributed 2,891 e-transits (+148 per cent).

The big problem is that the sales growth of the Mustang Mach-E and F-150 Lightning, in particular, came at a high price. Ford lowered prices in North America at the beginning of the year. However, it has already become apparent that the car manufacturer expects falling unit sales in the medium term. Since 1 April, production of the electric pickup has only been running in one-shift operation – in 2023, it was still three shifts.

The current sales situation has also led Ford’s top management to rethink its model planning: A large seven-seater SUV with electric drive will be pushed back slightly, as is production at the BlueOval City EV plant in Tennessee, which is currently under construction. According to earlier information, a new type of electric pickup codenamed T3 could also be built there. Instead, Ford wants to initially concentrate on smaller, more affordable electric vehicles. According to information from March, the electric platform for the 25,000-dollar electric car could debut at the end of 2026. However, it remains to be seen whether or how far this date can be pushed forward with the new focus.

As such measures are not immediately effective, it will likely take a few months for Ford Model e’s financial results to improve – unless Ford can again achieve better prices due to demand. However, Ford expects a loss of 5.0 to 5.5 billion dollars for its EV division for the year as a whole. The latter already posted a loss of USD 4.7 billion for the full year 2023, which is why Ford – in combination with the expensive US collective bargaining agreement with the UAW union – had already cut back on investments.

Ford Motor Company sales across all divisions rose by three per cent to 42.8 billion dollars in the first quarter, even slightly higher than expected by analysts (average expectation of 40.1 billion dollars). Group EBIT fell by 18 per cent to 2.8 billion dollars. However, the biggest contribution to this was not made by the combustion car business Ford Blue, but by the van division Ford Pro with a whopping 3.0 billion dollars and an EBIT margin of 16.7 per cent.

electrek.co, ford.com, ford.com (Annual Report as PDF)