Ford’s electric car division reports another billion-euro loss
With a loss of a whopping 2.46 billion dollars in the first half of the year, Ford Model e has already incurred a loss of 3.66 billion dollars after three quarters. In all three quarters, the division recorded an EBIT loss of over one billion dollars. In Q3/2023, the annual report already showed an EBIT loss of 1.3 billion dollars.
This is mainly due to the high expenditure for investments in development and the plants combined with low sales – meaning that the electric car division is missing out on revenue. In the third quarter, Ford Model e achieved a turnover of 1.2 billion dollars with 32,000 vehicles sold – or 37,500 dollars per vehicle. By comparison, the van division Ford Pro was able to increase its deliveries by nine per cent to 342,000 vehicles in Q3, generating a turnover of 15.7 billion dollars. The combustion engine division Ford Blue is still the largest division of the group and achieved sales of more than 26 billion dollars with 721,000 vehicles (-2%). While Ford Blue and Ford Pro are highly profitable, the situation is different in the e-car business.
“The $500 million of year-over-year cost improvements were offset by expected industrywide pricing pressure,” Ford writes. “The segment continues to improve its profit trajectory, achieving almost $1 billion in cost improvements year-to-date.”
While Ford has repeatedly reduced investment in this area due to losses and the slower transformation to electric cars and announced more hybrid vehicles instead of new electric models, it remains committed to eMobility. “Ford continues to remove barriers to EV adoption by offering customers greater access to charging both at home, through the Ford Power Promise, and on the road through a growing charger network. And the nearly 3,000 Ford dealers now able to sell electric vehicles are a competitive advantage as Ford reaches new customers in areas of the U.S. that might otherwise be slow to adopt electric vehicles.”
“We are in a strong position with Ford+ as our industry undergoes a sweeping transformation,” says Ford CEO Jim Farley. “We have made strategic decisions and taken the tough actions to create advantages for Ford versus the competition in key areas like Ford Pro, international operations, software and next-generation electric vehicles. Importantly, over time, we have significant financial upside as we bend the curve on cost and quality, a key focus of our team.”
However, the US group is less optimistic for the current year for the time being: while company-wide EBIT of around ten billion dollars is expected, the management at Ford Model e anticipates an annual loss of around five billion dollars. In other words, the fourth quarter will probably see another billion-dollar loss.
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