Ford's E-Vehicle Division Loses Exceed Company's Total Profit for the Year
Auto giant claims a loss of $4.7 billion on its EV business last year, while the company reported profit of just $4.3 billion.
Yesterday afternoon, the Ford Motor Company reported that the operating loss it incurred on its EV business in 2023 exceeded its total profit for the year.
The report states that Ford Model E’s wholesales and revenue were both up at double-digit full-year rates. The start-up segment incurred a full-year EBIT loss of $4.7 billion, reflecting an extremely competitive pricing environment, along with strategic investments in the development of clean-sheet, next-generation EVs.
Sales volumes of the F-150 Lightning pickup and Mustang Mach-E SUV both were up year-over-year and respectively the top-selling electric pickup and No. 3 most popular EV of any type in the U.S. for 2023.
Ford continued to build momentum behind its software-enabled services. Total paid software subscriptions across all segments rose 8% sequentially in the fourth quarter to about 630,000.
During 2023, the company expanded availability of Ford’s BlueCruise advanced driver-assistance system to Great Britain, Germany and Spain, a first in that country – in addition to the U.S. and Canada. More than 290,000 BlueCruise-equipped Ford and Lincoln vehicles are now on the road, with customer use exceeding 2.3 million hours and 156 million hands-free miles – and counting.
However, the company sold 72,608 EVs last year and had an EBIT loss of $4.7 billion in its “Model e” segment. Thus, the auto giant lost a knee-buckling $64,731 for each EV it sold in 2023. To put that $64,731 per-vehicle loss in perspective, a top-of-the-line Mustang Mach-E listed on the website of a large Ford dealership in Austin, TX is selling for $66,615.
Ford Chief Operating Officer Kumar Galhotra said that the company entered 2024 with the talent and structure needed to correct quality and cost issues, contributing to growing fundamental strength and upside.
“We’re seeing green shoots of quality improvement, including in our new-product launches – with several important ones coming up this year,” Galhotra said. “Across our global industrial system we’ve identified and will land $2 billion in cost reductions, in areas like material, freight and manufacturing – and we’re just getting started.”
At a segment level, the outlook is for full-year 2024 EBIT of at least $8 billion to $9 billion from Ford Pro and about $7 billion to $7.5 billion from Ford Blue; an EBIT loss of $5.0 billion to $5.5 billion for Ford Model e; and earnings before taxes of about $1.5 billion from Ford Credit.
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