https://robertbryce.substack.com/p/fords-ev-bloodbath-continues
The losses keep coming. As I reported here in February, Ford Motor Co. lost $4.7 billion on its EV business in 2023, or about $64,731 for each EV it sold. Today, the company reported that over the first two quarters, it has lost nearly $2.5 billion on its Model e segment, meaning Ford’s EV losses are on track to total $5 billion in 2024. While the company’s per-vehicle losses declined somewhat during the second quarter, they are still stunning. Let’s take a quick drive through the results.
On July 3, the company published its second-quarter sales numbers. Its EV sales totaled 23,957 units, up 61% from the same period in 2023.
But the money numbers were published today, and they are sobering. Yes, the company sold 23,957 EVs during the quarter, but it lost $1.14 billion while doing so. Thus, Ford lost $47,585 for each EV it sold. In a press release, the company said it incurred the loss “amid ongoing industrywide pricing pressure on first-generation electric vehicles and lower wholesales. Those factors more than offset about $400 million in year-over-year cost reductions in the segment.”
In plain English, the company is saying that its cost-cutting efforts aren’t enough to make up for the price cuts it is being forced to make to attract buyers. To put that $47,585 per-EV loss in perspective, a Ford dealer in Austin currently has more than 20 Mustang Mach-E vehicles in stock selling for less than $47,000.
A bit more background on the company’s sales helps illustrate the scale of Ford’s faltering EV business. During the second quarter, Ford sold 199,463 F-Series trucks. Further, it sold more than half a million internal combustion engine vehicles (ICEVs). Thus, as seen above, the Dearborn-based auto giant sold 21 times more ICEVs than EVs.
The ongoing disaster in EVs has (finally) awakened Ford’s leaders from their money-losing stupor. Last Thursday, the company announced it would spend $3 billion to expand production capacity for its super-profitable F-Series line. In a July 18 press release, it said to meet “customer demand for one of its most popular and profitable vehicles,” it will add “initial capacity for 100,000 F-Series Super Duty trucks, including future multi-energy technology, at Oakville Assembly Complex in Ontario, Canada.” The press release also contains some telling words from the company’s COO, Kumar Galhotra:
This investment will benefit Ford, our employees in Canada and the U.S., and especially our customers who want and need Super Duty for their lives and livelihoods… It is fully consistent with our Ford+ plan for profitable growth, as we take steps to maximize our global manufacturing footprint, and our investments will have a fast payback. (Emphasis added.)
In other words, Ford has decided profitability matters. Rather than continue pouring money into its money-burning EV business, it will expand the production of the vehicles that keep the lights on, which means producing more F-150s and other vehicles that burn dino juice.
One final note that gives more proof that the EV craze is running out of steam: On Tuesday, General Motors CEO Mary Barra told Wall Street analysts that her company is deferring investments in EVs to ensure, as the Wall Street Journal put it, “the company doesn’t get ahead of demand.”
