Ford is losing boatloads of money on every electric vehicle sold

[Alfonso Maruccia]

A hot potato: Turning a substantial part of the automotive industry into an EV-only affair will likely take some time. Despite investing a significant amount of money into research and development, some carmakers are still losing a hefty sum on every EV model they sell.

One of the largest automotive companies in the world lost $1.3 billion in its EV-only business unit known as "Model e" in the first quarter. Ford's EV division sold 10,000 cars during the three-month period of the new fiscal year, which means that the corporation lost $132,000 on every vehicle delivered to customers.

In recent years, Ford joined other automakers in announcing a radical shift from traditional cars to a completely electric production. The industry-wide change is expected to be complete within the next few years, but today's automotive market is still mostly focused on gas-powered vehicles. Model e sales for the latest quarter were down 20 percent compared to the same period of the past year.

Revenue was down to $100 million, an 84 percent decline year-over-year, and Ford said that industry-wide price cuts were mostly responsible for these disappointing results. The US corporation isn't just losing money on every EV vehicle sold, as research and development on new generations of electric vehicles is still costing hundreds of millions of dollars per year.

Ford aims to eventually cover manufacturing costs for EV vehicles with sales alone, a goal the company hopes to achieve within the next 12 months. Meanwhile, Model e is projected to incur a $5 billion loss by the end of the fiscal year. According to Ford CFO John Lawler, although the carmaker managed to reduce costs by $5,000 per Mustang Mach-E unit sold, revenue was still declining " faster than we can take out the cost."

In 2023, Ford Model e incurred a $4.7 billion loss, despite selling 116,000 electric vehicles. However, it's not just Model e; other divisions of the US carmaker are also involved in EV manufacturing and sales. Ford Pro, the unit handling sales to business and government customers, is experiencing comparatively better performance with "strong" demand and orders. Ford announced that the US Postal Service has placed an order for 9,250 E-Transit vans to be delivered by the end of the year, and sustainability-focused company Ecolab has ordered over 1,000 F-150 Lightning pickups and Mustang Mach-E SUVs.

Primarily engaged in sales of traditional cars, Ford Pro was the main profit driver for the company during the first quarter. Revenues increased to $18 billion, marking a 36 percent rise with 409,000 vehicles sold, representing a 21 percent increase. Ford CEO Jim Farley assured investors that the company is implementing changes in its EV business, with the next generation of electric vehicles expected to be profitable in the near future.

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Ford is losing boatloads of money on every electric vehicle sold

 

[yRaz]

Okay, well here is an idea. Take all of the computers out of it that make the inside look like a low budget sci-fi movie, give us real buttons instead of a touch screen and you might be able to lower the cost while making them more appealing to the average consumer

 

[The Talking Tech]

The industry is rushing way too fast on full Electric Vehicles instead of introducing an all Hybrid line up of choices by every car manufacturer.

Electric cars currently have way too many shortcomings and we live in an era where we want less of that.

People would warm up more into the EV idea once they see the benefits hybrids bring.

I know for sure you will never catch me buying a car in which I would have to wait more than 30 minutes just to get my car going again and I know most people wouldn't want that either.

 

[stewi0001]

Okay, well here is an idea. Take all of the computers out of it that make the inside look like a low budget sci-fi movie, give us real buttons instead of a touch screen and you might be able to lower the cost while making them more appealing to the average consumer

I second that, I want a car that is a car...

 

[yRaz]

The industry is rushing way too fast on full Electric Vehicles instead of introducing an all Hybrid line up of choices by every car manufacturer.

Electric cars currently have way too many shortcomings and we live in an era where we want less of that.

People would warm up more into the EV idea once they see the benefits hybrids bring.

I know for sure you will never catch me buying a car in which I would have to wait more than 30 minutes just to get my car going again and I know most people wouldn't want that either.

Do you know how badly I want a plug in hybrid truck? Like, let me charge it at my house at night and if I happen to get low on battery when using it AS A TRUCK, then the gas motor/generator is there. Most days I'm just carrying a few hundred pounds of tools around with me, but on the few days a month when I need to pick up a ton of gravel or tow a trailer it would be great. I would save so much money in gas by being able to charge at home. Even if my range goes from 300 to 100 when towing, l get like 8MPG when towing. I would easily save $30-40 in gas and I rarely work more than 50-60 miles away from home. Not to mention the hybrid systems are more fuel efficient anyway. A 100KWh battery pack would cost me about $20 to charge where as a tank of gas costs me almost $150 to fill.

 

[yRaz]

I second that, I want a car that is a car...

I'm so sick of all these super connected cars. Like, your car doesnt have to upload content to your daughter's only fans while you give her a ride to her free Palestine protests

 

[hahahanoobs]

I have no pity. If it was up to them they'd never go electric until Chinese EV sales threatened their ICE sales on home soil.

High cost of EV's is partly because the tech is relatively new, and mostly because companies are greedy.

 

[Dreadcthulhu]

Okay, well here is an idea. Take all of the computers out of it that make the inside look like a low budget sci-fi movie, give us real buttons instead of a touch screen and you might be able to lower the cost while making them more appealing to the average consumer

While I am not a huge fan of all the touch screen stuff either, they don't actually cost all that much to put in these days; by most estimates they are actually cheaper (for the automaker) than putting in decent physical controls. Which is a huge reason why automakers are almost all moving to them.

The only way to make electric cars significantly cheaper than they are now is to get the price of the batteries down (pretty much everything else in an EV will be the same price or cheaper to manufacture than a comparable gas car) and to sell enough of them to properly amortize all the R&D and factory set up costs.

 

[Theinsanegamer]

While I am not a huge fan of all the touch screen stuff either, they don't actually cost all that much to put in these days; by most estimates they are actually cheaper (for the automaker) than putting in decent physical controls. Which is a huge reason why automakers are almost all moving to them.

The only way to make electric cars significantly cheaper than they are now is to get the price of the batteries down (pretty much everything else in an EV will be the same price or cheaper to manufacture than a comparable gas car) and to sell enough of them to properly amortize all the R&D and factory set up costs.

Tesla mdoel 3s are profitable at less then half the ASP of a f-150 lightning. It's not the batteries. Ford is terribly mismanaged and god only knows where these cost overruns are coming from.

II hate looking at screens all day. I do enough of that at work. It's all electronic internally anyway, just give me a set of physical gauges as an option! I REALLY hate how they just stick those screens everywhere with 0 effort to integrate them into the dashboard.

Do you know how badly I want a plug in hybrid truck? Like, let me charge it at my house at night and if I happen to get low on battery when using it AS A TRUCK, then the gas motor/generator is there. Most days I'm just carrying a few hundred pounds of tools around with me, but on the few days a month when I need to pick up a ton of gravel or tow a trailer it would be great. I would save so much money in gas by being able to charge at home. Even if my range goes from 300 to 100 when towing, l get like 8MPG when towing. I would easily save $30-40 in gas and I rarely work more than 50-60 miles away from home. Not to mention the hybrid systems are more fuel efficient anyway. A 100KWh battery pack would cost me about $20 to charge where as a tank of gas costs me almost $150 to fill.

Lucky for you the RAMcharger is coming next year.

 

[Neatfeatguy]

The postal service is going to go belly up on this move with wanting 9,250 electric vans by the end of the year. They'll need to not only spend the money on the vans, but need into spend a crap ton of money to get charging stations setup and possibly updating some of the electrical infrastructure at some some of these facilities.

9,250 E-vans. I'm not sure what kind of pricing deal the postal service got for this kind of order, but a single 2023 Ford E-Transit van lists at $45,995. If they bought them all at that price, that is over $416 million just for the vehicles alone. Even if they were to get 10% off, that's still almost $41,400 each or nearly $383 million for the entire fleet.

Then they're going to have to take up the tail pipe in higher insurance costs and higher costs for repair services......for the love of....Did ex-CEO Stephen Scherr from Hertz step into a role at the postal service?

Don't these large corporations ever take a look at a the companies that jumped on the electric vehicle bandwagon early and lost large?

WTF, postal service? You were just granted a $50bil bailout from the government in 2022. Did you look at the car dealerships that got a bailout back in '08, say, "Here. Hold my beer." as you plan on driving the company back into financial difficulties because you're ignorant?

Ecolab is only going for a 1,000 EVs, at least that's a more reasonable quantity to manage and not going all Hertz.

 

[yRaz]

The only way to make electric cars significantly cheaper than they are now is to get the price of the batteries down (pretty much everything else in an EV will be the same price or cheaper to manufacture than a comparable gas car) and to sell enough of them to properly amortize all the R&D and factory set up costs.

I'm tired of hearing this, the profit margins on Lithium batteries are really high. Lithium has dropped significantly in price over the last 5 years but batteries have not. The whole "EVs are expensive" thing is a lie. What happens is that companies invest heavily in a company that makes batteries, pays "market price" for them and then passes on the cost to the consumer. And by convoluting the price like they can mark it as a loss and write the loss off on their taxes. Companies don't make products that loose them money. If they did then they wouldn't be a company for very long

 

[WhiteLeaff]

Batteries, the main component of EVs, have fallen to a fraction* of the price in recent years, what the hell is Ford doing?

CATL and BYD have announced that they will lower the price of LFP cells to U$50 by the end of the year.

CATL, BYD To Slash Battery Prices By 50% In 2024. BOOM! EVs Win! - CleanTechnica

CATL says it will begin selling LFP battery cells in the VDA format at price less than $60 per kWh hour by the middle of this year.

cleantechnica.com

 

[ScottSoapbox]

I have no pity. If it was up to them they'd never go electric until Chinese EV sales threatened their ICE sales on home soil.

High cost of EV's is partly because the tech is relatively new, and mostly because companies are greedy.

Ford is selling their EV's for *less than they cost to make* and you think the high price is "mostly company greed". Seriously? How does that math work in your head?

EVs are expensive because A) the tech is not ready, B) most people don't want EVs, and C) the government is forcing companies to make them anyway. I will explain the latter so you don't misunderstand. More people wanting EVs allows greater scale which lowers the cost per unit (I.e., economies of scale).

The reason companies are willing to sell EVs *below cost* is A) the government is making them sell a certain amount of EVs and B) in the hopes that if they can sell enough of them, they can get enough of a scale efficiency to make them profitable.

They can't "just sell less" because they have already bought all the really expensive equipment to make any EVs and the only way that makes financial sense is if they can spread these large fixed costs over enough units that it doesn't raise the individual prices too much.

This whole companies set prices "because greed" talking point of politicians instead of the reality that they have to first pay for all of the expenses of making the product before they can make any profit whatsoever is just tiresome.

 

[ScottSoapbox]

Batteries, the main component of EVs, have fallen to a fraction* of the price in recent years, what the hell is Ford doing?

CATL and BYD have announced that they will lower the price of LFP cells to U$50 by the end of the year.

CATL, BYD To Slash Battery Prices By 50% In 2024. BOOM! EVs Win! - CleanTechnica

CATL says it will begin selling LFP battery cells in the VDA format at price less than $60 per kWh hour by the middle of this year.

cleantechnica.com

A) Any R&D spent in lowering the cost of individual batteries has to be repaid at some point because R&D money has to come from somewhere.

B) The real battery problem is their energy density. Adding batteries currently adds enough weight that you then have to add even more batteries to haul that weight around.

If tomorrow a new battery type could hold 10X the energy and recharge 20X as fast at the same size, weight, and cost, WAY MORE people would be interested in EVs (and they could be made cheaper than today's and handle better too)

(Props on the graph inclusion in your comment!)

 

[letsgoiowa]

The industry is rushing way too fast on full Electric Vehicles instead of introducing an all Hybrid line up of choices by every car manufacturer.

Electric cars currently have way too many shortcomings and we live in an era where we want less of that.

People would warm up more into the EV idea once they see the benefits hybrids bring.

I know for sure you will never catch me buying a car in which I would have to wait more than 30 minutes just to get my car going again and I know most people wouldn't want that either.

People screamed about Toyota doing this, but they're laughing all the way to the bank right now.

 

[Burty117]

While I am not a huge fan of all the touch screen stuff either, they don't actually cost all that much to put in these days; by most estimates they are actually cheaper (for the automaker) than putting in decent physical controls. Which is a huge reason why automakers are almost all moving to them.

I doubt that logic, even from the Automakers. Sure, the screen might be cheaper to put in, but you’ve then got to spend the money on programming the damn thing, a way more expensive computer behind the scenes to actually run the software and design everything.

With physical buttons, you don’t need a GPU at all, no difficult programming since each switch does a single job, no UI design, and buttons just work, you don’t need to push out updates to make the buttons work more reliably.

 

[Superconductor]

People screamed about Toyota doing this, but they're laughing all the way to the bank right now.

You don't know Toyota very well...

 

[yRaz]

You don't know Toyota very well...

I did cocaine with Toyota when I was on an LSD bender, but that might have been a toy Yoda

 

[p51d007]

Okay, well here is an idea. Take all of the computers out of it that make the inside look like a low budget sci-fi movie, give us real buttons instead of a touch screen and you might be able to lower the cost while making them more appealing to the average consumer

Yeah, but if they remove all the computers and what not...YOU could actually repair the truck yourself instead of having to take it to the dealer to be overcharged, and, they wouldn't be able to mine the data and send it to the insurance companies & government. <wink>

 

[Glen Glenn]

I'm so sick of all these super connected cars. Like, your car doesnt have to upload content to your daughter's only fans while you give her a ride to her free Palestine protests

 

[Glen Glenn]

What does "like" mean. Like as in Ice Cream??

 

[Glen Glenn]

A hot potato: Turning a substantial part of the automotive industry into an EV-only affair will likely take some time. Despite investing a significant amount of money into research and development, some carmakers are still losing a hefty sum on every EV model they sell.

One of the largest automotive companies in the world lost $1.3 billion in its EV-only business unit known as "Model e" in the first quarter. Ford's EV division sold 10,000 cars during the three-month period of the new fiscal year, which means that the corporation lost $132,000 on every vehicle delivered to customers.

In recent years, Ford joined other automakers in announcing a radical shift from traditional cars to a completely electric production. The industry-wide change is expected to be complete within the next few years, but today's automotive market is still mostly focused on gas-powered vehicles. Model e sales for the latest quarter were down 20 percent compared to the same period of the past year.

Revenue was down to $100 million, an 84 percent decline year-over-year, and Ford said that industry-wide price cuts were mostly responsible for these disappointing results. The US corporation isn't just losing money on every EV vehicle sold, as research and development on new generations of electric vehicles is still costing hundreds of millions of dollars per year.

Ford aims to eventually cover manufacturing costs for EV vehicles with sales alone, a goal the company hopes to achieve within the next 12 months. Meanwhile, Model e is projected to incur a $5 billion loss by the end of the fiscal year. According to Ford CFO John Lawler, although the carmaker managed to reduce costs by $5,000 per Mustang Mach-E unit sold, revenue was still declining " faster than we can take out the cost."

In 2023, Ford Model e incurred a $4.7 billion loss, despite selling 116,000 electric vehicles. However, it's not just Model e; other divisions of the US carmaker are also involved in EV manufacturing and sales. Ford Pro, the unit handling sales to business and government customers, is experiencing comparatively better performance with "strong" demand and orders. Ford announced that the US Postal Service has placed an order for 9,250 E-Transit vans to be delivered by the end of the year, and sustainability-focused company Ecolab has ordered over 1,000 F-150 Lightning pickups and Mustang Mach-E SUVs.

Primarily engaged in sales of traditional cars, Ford Pro was the main profit driver for the company during the first quarter. Revenues increased to $18 billion, marking a 36 percent rise with 409,000 vehicles sold, representing a 21 percent increase. Ford CEO Jim Farley assured investors that the company is implementing changes in its EV business, with the next generation of electric vehicles expected to be profitable in the near future.

Permalink to story:

Ford is losing boatloads of money on every electric vehicle sold

Just concentrate on "little" cars like Tesla.

 

[viperfl]

Do I hear automotive bailout 2.0 in our future?

 

[Jigs Gaton]

Okay, well here is an idea. Take all of the computers out of it that make the inside look like a low budget sci-fi movie, give us real buttons instead of a touch screen and you might be able to lower the cost while making them more appealing to the average consumer

hilarious and exactly so. but why not go one step further, and put in an ICE for sound effects (and backup power), add a gear shifter and better handling, and then take out all the blinding eye candy!

 

[emmzo]

That's what happens when you have large government subsidies to prop up a non competitive industry. Some will make it, Tesla, most won't. Market dictates and for most people, conventional cars are better. I'm not a proponent of gas either, actually, I believe hydrogen makes more sense in terms of charging time and range. I'm just saying make them better, cheaper and people will buy it, it's as simple as that.