Ford gathered investors and market analysts at the New York Stock Exchange on Thursday morning to discuss its current and future financial results, which are no longer presented by geographic region but by its three main businesses.
We’re talking about Ford Blue (gasoline and hybrid vehicles), Ford Model e (electric vehicles) and Ford Pro (commercial vehicles and services).
At the same time, we learn that the Ford Model e division expects a loss of US$3 billion, or the equivalent of CA$4.1 billion at today’s exchange rates, for the whole of 2023. That would represent a nearly 50% increase over the $2.1 billion (CA$2.9 billion) lost with electric vehicles in 2022.
Photo: Ford
All of this can be explained by the large investments that Ford has made to significantly increase production of the Mustang Mach-E, F-150 Lightning and E-Transit in 2023 (the target is 600,000 units in total). Not to forget the development of new products, new batteries and a mega-factory that will see the light of day in Tennessee around 2026, the year when Ford plans to be able to assemble 2 million electric vehicles.
In comparison, the Ford Blue and Ford Pro divisions expect sales this year of $7 billion and $6 billion, respectively (about $9.5 billion and $8.2 billion in Canada) . It is largely thanks to them that the American manufacturer is able to finance its efforts in the electrical sector.
Photo: Ford
“We’re not just changing the way we present our financial results. We’re also transforming the way we think, make decisions and run the business to deploy our resources to achieve the best possible returns,” said John Lawler, Ford’s chief financial officer.
Elsewhere in the industry, General Motors is also losing money with its electric vehicles. The same applies to young companies like Rivian and Lucid. The production volume is simply not yet sufficient to achieve economies of scale and to compensate for the colossal expenditures for development and expansion.