by Mish Shedlock, Mish Talk:
Ford (F) reports a huge loss on every EV. Sales are down 20 percent holding the losses to $1.3 billion.
My tongue in cheek “good news” comment aside, Ford Just Reported a Massive Loss on Every Electric Vehicle it Sold.
Ford’s electric vehicle unit reported that losses soared in the first quarter to $1.3 billion, or $132,000 for each of the 10,000 vehicles it sold in the first three months of the year, helping to drag down earnings for the company overall.
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Ford, like most automakers, has announced plans to shift from traditional gas-powered vehicles to EVs in coming years. But it is the only traditional automaker to break out results of its retail EV sales. And the results it reported Wednesday show another sign of the profit pressures on the EV business at Ford and other automakers.
The EV unit, which Ford calls Model e, sold 10,000 vehicles in the quarter, down 20% from the number it sold a year earlier. And its revenue plunged 84% to about $100 million, which Ford attributed mostly to price cuts for EVs across the industry. That resulted in the $1.3 billion loss before interest and taxes (EBIT), and the massive per-vehicle loss in the Model e unit.
The losses go far beyond the cost of building and selling those 10,000 cars, according to Ford. Instead the losses include hundreds of millions being spent on research and development of the next generation of EVs for Ford. Those investments are years away from paying off. And that means this is not the end of the losses in the unit – Ford said it expects Model e will have EBIT losses of $5 billion for the full year.
Ford rival General Motors reported earlier this week that it remains on track to have its North American EV business turn profitable in the second half of this year, while Stellantis, which makes cars and trucks in North America under the Jeep, Ram, Dodge and Chrysler brands, said its European EV business was already profitable last year.
On Tuesday Tesla, the world’s largest EV maker, reported that its adjusted earnings plunged 48% in the first quarter as revenue fell 9%, after it reported the first year-over-year drop in sales since the pandemic.
These losses are despite huge tax incentives and subsidies. GM is on track for profits counting on subsidies.
Ford is more dependent on truck buyers than GM, and truck buyers have shown little interest in electric trucks.
