Ford projected billions in loses for EVs in 2023

Well known carmaker Ford had projected billions in losses for their electric vehicle sector, but they still had profits go up in other areas. A report on the projected Ford EV losses said the following:

And those losses are going to rise, at least in the short term. Ford said it expects a Model e EBIT loss of $4.5 billion for the full year, up from its earlier forecast of a $3 billion loss for all of 2023. And it pushed back when it expects to start producing EVs at a 600,000 annual pace to some time in 2024, rather than by the end of 2023. It said the pricing environment for EVs was one of the main reasons for the new loss estimate.

EV leader Tesla has been regularly cutting prices throughout this year. In response, other automakers, including Ford, have responded with EV price cuts of their own.

But the company’s Ford Blue division, which makes most of its gas-powered consumer vehicles, posted $2.3 billion in EBIT profits, while Ford Pro, which is its commercial vehicle division selling primarily traditional internal combustion vehicles, contributed $2.4 billion.

The company raised its full-year adjusted EBIT target to between $11 billion and $12 billion, up from its earlier guidance of $9 billion to $11 billion.

Ford CEO Jim Farley said that “pricing pressure [for EV’s] has dramatically increased in the last 60 days.”

“EV price premiums over internal combustion vehicles fell more than $3,000 in the second quarter and nearly $5,000 in first half,” said Farley. “We expect the EV market to remain volatile until the winners and losers shake out.” But he confidently predicted that Ford “will be one of the winners.”

Still Ford, like the other traditional automakers moving to shift from ICE vehicles to EVs, is losing money at this stage. Ford’s numbers work out to a loss of about $32,000 per EV that it sold in the second quarter, compared to a profit of $3,200 per vehicle sold by the Ford Blue division.