Ford's EV Business is Becoming a Real Drag

by Chris Teague

October 27th, 2023 3:00 PM

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ford s ev business is becoming a real drag

Ford and the UAW have reached a tentative agreement that will end the strike at some locations, but the automaker is looking at lower profits and a challenging road ahead with electrification.

The automaker’s earnings fell short of expectations, and it saw continued losses from its electric vehicle business. Ford said it would delay some of the planned EV investments after seeing less demand and more price pressure than expected.

Ford already announced significant losses from its electrification efforts, but its EV division posted greater shortfalls than projected. It lost $1.3 billion before taxes and interest, and Ford noted a $4.5 billion loss overall.

The writing has been on the wall for a while, so none of this should be a huge surprise. Ford already noted losses in its EV business, and we’ve seen multiple changes in its pricing and production strategies for the F-150 Lightning, indicating that demand for the electric pickup is fluctuating.

Ford said consumers are unwilling to pay more for an EV than a comparable internal combustion vehicle, putting significant downward pressure on pricing. Though more affordable models are allegedly on the horizon, the EV market as a whole is too expensive, preventing many potential buyers from getting behind the wheel. Upcoming changes to the EV tax credit rules may help, but it will likely be years before EVs reach parity with their gas counterparts.

[Image: Ford]

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8 of 85 comments

TheEndlessEnigma on Oct 29, 2023

Look folks this is really simple. Unless you live in a single-family home or something with a garage/carport or parking pad THAT IS YOURS plug in EV's are simply not going to work for the majority of the car driving population. Think about that. If you live in a condo, apartment, townhouse....something that requires street or communal parking (parking lots/parking garage) then plug-in EV adoption is not the "just buy one" play you want it to be. "Oh, but you can use publically accessible chargers". Yeah, ok, YOU do that first, over 3-6 months then report back how that works for you. My mother lives in a mid-atlantic row-house development from the 1950's, about 1500 homes. ALL OF IT is street parking, all of it. I've driven around over the past couple of days (I'm visiting), I can say without exaggeration, there are no plug-in EV's in the community, because they do not work in this community. Now, I stand aside and let the flaming begin from those in this community who believe that EV's are the only way to go and you are fool for not buying into them.

5 Reply
- See 2 previous
- DungBeetle62 on Oct 29, 2023
  
  Until EV charging is as ubiquitous as the corner gas station, there's gonna be some problems.
  Maybe Cadillac can still get away with their "goal" of being all-EV SUVs and Crossovers because that demographic is all the more likely to have a place at home to plug it in, but someone is likely to get caught with their pants down by both betting heavily in EVs (to the extent of slacking on their ICE technology) and ridding their product lineup of anything on the affordable end.
  If a Chinese manufacturer started exporting a little $12,000 bare-bones ICE hatchback or sedan tomorrow (even with no prior history... people bought 160,000 Hyundai Excels that first year) they'd have a home run.
  
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- TheEndlessEnigma on Oct 29, 2023
  
  There is a bare bones ICE vehicle (hatchback and sedan) that's around $16000 that everyone trashes at every opportunity, Mitsubishi Mirage.
  
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- 28-Cars-Later on Oct 29, 2023
  
  This is a larger view, but the direction things are going is a future where most citizens are renters who own nothing and their mode of transit is going to be whatever passes for public transportation where they live and their feet. The model is literally 1984, the new " proles" are 85% of society, the Outer Party becomes the next 13% with "freedoms" such as BEV access but live under more scrutiny/surveillance than proles and the Inner Party class continues to rule but now any gloves currently present have come off. This is why the narrative parroted by US State Media never sufficiently addresses the limited supply of rare earths, the fact the existing power grid cannot support them en-masse, nor the fact the public infrastructure is too expensive and won't be sufficiently developed.
  Adding to this IMO the attacks on natural gas have been because the "plan" for the US (if it can be called one) is to spin up cheap and reliable electric plants powered by natural gas since nuclear is clearly not happening post Fukushima. Big Brother needs a percentage of the existing natural gas supply to accomplish this which is why Fedgov is slowly phasing out gas appliances through vindictive regulations. This electricity however is not entirely intended for BEV fleets but more to power the open air control grid for the proles they have been slowly building since 2020. Based on the UK's Zero Future, err Net Zero, report I'd say the first milestone to dystopia is 2035 and probably in 2025 the other Five Eyes countries (inc. the US) will start to bring the hammer down to this end.
  
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- El scotto on Oct 29, 2023
  
  No chargers; 200 + units in my complex; five Teslas. I do live in an IT intensive burb of DC, so chargers everywhere.
  
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- Ben on Nov 05, 2023
  
  Well said. We live in a "townhouse" condo with no real plug-in facility. (Snaking an extension cord into the parking lot looks chancy.) The only EV I'd want is a pre-2017 Model S with the lifetime free supercharger use, there's a Tesla supercharging station right on my commute. I drive 90 miles a day; free "fueling" with a SpaceX RS7 thrown in appeals to me.
  
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Alan on Oct 29, 2023
The transition to EV's has a number of issues to contend with. I think most of the issues are worth considering when investing in a new vehicle.
1. Range anxiety,
2. initial outlay, including charging equipment at home,
3. management of vehicle, ie, maintenance, charging flexibility, etc,
4. large financially outlays down the track, ie, new battery, cost of "EV tyres", etc,
5. familiarity of new technology, people unsure of its reliability, costs, etc, and
6. cost of similar ICE vehicle vs EV.
Manufacturers globally have spent the last couple of decades or so pushing back against the transition to EVs. Manufacturers have considerable lobby power, now the time has come to transition and now they complain after pushing back.

The US has a particular problem, big pickups and SUVs is what keeps the motoring industry alive.
1 Reply
- Abraham on Oct 29, 2023
  
  Range anxiety = range restricted.
  Honda Civic range: 500 miles, but due to gas stations everywhere range is actually unlimited. No one talks about range with a gasoline powered vehicle. It’s a non-issue.
  EV defenders keep saying that range anxiety is over hyped but it’s not, it’s a massive problem and probably the number four reason why someone chooses not to buy an EV. The top three most important factors in choosing not to purchase an EV are price, price and price.
  
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El scotto on Oct 29, 2023

Oh Lordy, it's like high school all over again. One of the AV club nerds got an EV, some of the hipper but geek-positive kids got an EV. Some of the tag along kids kids thought about making EV's, ie. GM & Ford. The head-knockers refused facts and math and threatened to beat up any even speaking positively of an EV. Lambda, Lambda, Lambda rules!

1 Reply
Wjtinfwb on Oct 30, 2023

Pretty hard to compete with Tesla when the landscape for legacy manufacturers like GM, Ford, etc. is so different. Tesla was treated like a Tech company, Billions of VC and Federal dollar flooded in during the early days just to keep them alive. Once production started, Tesla was given a pass for their shoddy assembly quality, poor fit & finish and early recalls, all of those would have been deemed unacceptable if it was a Chevy, but hey, this is Tech, it's not expected to work right, correct? No investment in dealer or service network nationwide and in some cases a lengthy wait for parts or service, that would be unacceptable if it was a Ford where the dealer would be crucified for not getting the car back on the road in 24 hours. Finally, the legacy manufacturers dependence on the UAW and their inflated wages and benefits put building EVs at a disadvantage compared to Tesla. I'm not knocking Tesla, what they accomplished has been remarkable. Just that the playing field and expectations are not the same for a start up as they are for a legacy OEM.

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