Ford Loses $3 Billion on EV Business Unit, Don't Fret Yet
Ford told investors and analysts today that it expects its electric-vehicle unit to lose $3 billion this year, but that news isn't nearly as dire as it might sound at first glance.
Indeed, Ford stock was up 1.9 percent to $11.70 as of midday today.
Though Ford is apparently burning through money when it comes to its EV business unit, it expects to be on the positive side of the ledger eventually. The company projects a pre-tax margin of 8 percent by late 2026.
Ford announced these numbers ahead of changes to its quarterly reporting that will start May 2 when it reports this year's first-quarter results.
Ford will no longer report by region, instead breaking things out among three business units: Model e for EVs, Blue for products that have internal-combustion engines, and Pro for commercial vehicles.
Ford will provide quarterly and annual sales and market-share results for the top six global markets -- including the United States, China, and Germany -- but not by region.
The company projects that Model e will have a three-year loss of $6 billion for 2021-2023. That includes a pro-forma loss of $2.1 billion last year. It also believes its newest slate of EVs, such as the Mustang Mach E and Ford F-150 Lightning, will be profitable on a pre-tax basis by the time 2024 ends.
Overall, Ford took a pre-tax loss of $600 in China, broke even in Europe, and had a $400 million profit in South America. Most of its $9.2 billion in pre-tax and pre-interest earnings came in North America.
Ford expects to see Pro have a $6 billion pre-tax profit this year and Blue a $7 billion pre-tax profit. The former would nearly double the previous year.
The Blue Oval projects that it will cut EV costs by producing more components in-house, and it also projects an EV production capacity of 600,000 by the end of this year and 2 million by the end of 2026. Ford says it intends to use that capacity -- meaning it expects to sell that many EVs. It also thinks half of its EV sales, at least initially, will be from new customers.
[Image: Ford]
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Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.
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This reminds me of the dot com bust of the late 1990s. Throughout history reality always seems to catch up with fads. One day we will look back at this EV charade and say to ourselves what were we thinking.
GM EV sales are even worse than Ford, and they too will have to face the fact EV just aren't popular. The only exception to this is Tesla, which will soon be impossible to catch.
"[Ford] expects [EVs] to be on the positive side of the ledger eventually."
Ridiculous. Even if a safe and clean battery technology is eventually developed, there is specifically no plan to EVER build out the electrical generating capacity or the electrical distribution system needed support widespread transition to EVs.
That is THE PLAN. Get people to switch to EVs, then don't let them charge them. The mainstream Democrat eco-left has always hated the liberty that the automobile affords to individuals, and they have always strategized how they are going to end the automobile.
It's something in their commie brains, a weird anti-liberty aesthetic, just as they have always loved the fantasy of public transportation. They want everything to be under government.
It makes a perverse kind of sense. The Democratic Party was founded as the party of slavery and communism is universal slavery so it is natural in a way that they would eventually become the full-on communists that they now are today.
Maybe they somehow think that when everyone is a slave, each of them will somehow be the slave-master, or maybe they just love the idea of being a slave, but whatever the explanation, anti-liberty is life to them, and one of its manifestations is a fundamental hatred of the automobile. They have been declaring publicly that they want to get rid of private cars for fifty years!
Anyone who thinks they are going to build out the massive electrical infrastructure necessary to enable electric private cars is out of their mind. Democrats will never do this. They will die first.
We've already seen in California what is coming. At the same time as they are mandating an end to gasoline powered vehicles they are ordering people who have already switched to EVs not to charge them because there is not enough electricity, yet they explicitly have no plans to produce more electricity, never mind deliver it.
Can Ford add 2 + 2 ? Apparently not. EV mandates are a plan to END the automobile, and there is obviously no money in that for the automobile industry.
Ford's stupid woke management suicided their company. They jumped the company into a track that runs off the edge of the Grand Canyon.
"Wheee, aren't we virtuous," they praise themselves from their golden parachutes as their plants and their employees all crash to the valley floor a mile below.