https://edition.cnn.com/2024/04/24/business/ford-earnings-ev-losses/index.html
Ford, like most automakers, has announced plans to shift from traditional gas-powered vehicles to EVs in coming years. But it is the only traditional automaker to break out results of its retail EV sales. And the results it reported Wednesday show another sign of the profit pressures on the EV business at Ford and other automakers.
The EV unit, which Ford calls Model e, sold 10,000 vehicles in the quarter, down 20% from the number it sold a year earlier. And its revenue plunged 84% to about $100 million, which Ford attributed mostly to price cuts for EVs across the industry. That resulted in the $1.3 billion loss before interest and taxes (EBIT), and the massive per-vehicle loss in the Model e unit.
The losses go far beyond the cost of building and selling those 10,000 cars, according to Ford. Instead the losses include hundreds of millions being spent on research and development of the next generation of EVs for Ford. Those investments are years away from paying off.
And that means this is not the end of the losses in the unit – Ford said it expects Model e will have EBIT losses of $5 billion for the full year.
The company said it is its “intention” to be have EV pricing cover the actual costs of building each EV, rather than covering all the research and development costs, within the next 12 months. But a price war among EVs for about a year and a half has made even that measure of profitability very difficult said Ford CFO John Lawler. He said while Ford has removed about $5,000 in cost on each Mustang Mach-E, “revenue is dropping faster than we can take out the cost.”
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Despite the EV losses, Ford CEO Jim Farley said in a call with investors the company is making changes in its EV business, and that the company’s planned next generation of EVs will allow it to be profitable on that business in the near future.
Ford Pro, which primarily sells traditional internal combustion vehicles, was the primary profit driver for Ford in the quarter, posting EBIT of $3 billion, or more than double what it made a year ago, as revenue from the unit rose 36% to $18 billion. The number of vehicles sold by Ford Pro was up 21% to 409,000.
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On Tuesday Tesla, the world’s largest EV maker, reported that its adjusted earnings plunged 48% in the first quarter as revenue fell 9%, after it reported the first year-over-year drop in sales since the pandemic.
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Jo Nova: The propaganda never ends.
Meanwhile, two days earlier the IEA chief said the EV revolution was rolling on just fine:
CNN readers must be confused.
The electric car revolution is on track, says IEA
[CNN] Global electric vehicle sales are set to rise by more than a fifth to reach 17 million this year, powered by drivers in China, according to the International Energy Agency.
In a report Tuesday, the IEA projected that “surging demand” for EVs over the next decade was set “to remake the global auto industry and significantly reduce oil consumption for road transport.”
So the global EV market is being powered by “drivers in China”, like these drivers perhaps who left their brand new EV’s rotting in fields in China. That would be imaginary drivers?
As Stephen Wilmot said in The Wall Street Journal last year, if Ford just canned the EV unit, its adjusted operating profit would be 50% higher. Surely that beckons…
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CNN: The electric car revolution is on track, says IEA – London CNN — Global electric vehicle sales are set to rise by more than a fifth to reach 17 million this year, powered by drivers in China, according to the International Energy Agency. In a report Tuesday, the IEA projected that “surging demand” for EVs over the next decade was set “to remake the global auto industry and significantly reduce oil consumption for road transport.”
It expects half of all cars sold globally to be electric by 2035, up from more than one in five this year, provided charging infrastructure keeps pace. The IEA includes battery electric vehicles and plug-in hybrid vehicles in its definition of EVs.
The agency’s bullish long-term outlook for EVs — based on current government policies — comes just days after the world’s biggest battery EV maker Tesla slashed its prices in major markets to counter declining sales and growing competition from Chinese upstarts and established carmakers.
Recent negative headlines about slowing EV penetration are out of step with positive global trends, according to IEA executive director Fatih Birol. The data “does not at all show a reverse of the growth of electric cars. It shows an extremely robust increase of global electric car sales,” he told reporters Tuesday.
