The Ford Motor Company has projected a $4.5 billion loss for electric vehicles in its second-quarter financial results for 2023.
The figure is nearly twice as much as its $2.1 billion loss on its Model E division in 2022.
Despite the EV losses, Ford posted a $1.9 billion net income bringing in $45 billion in net revenue.
The company also earned $2.4 billion in its commercial division, Ford Pro, while its gas and hybrid division, Ford Blue, earned $2.3 billion.
Ford CEO Jim Farley said, “The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford.”
“EV customers are brand loyal, and we’re winning lots of them with our high-volume, first-generation products; we’re making smart investments in capabilities and capacity around the world; and, while others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away.”
“The shift to powerful digital experiences and breakthrough EVs is underway and going to be volatile, so being able to guide customers through and adapt to the pace of adoption are big advantages for us,” Farley added.
“Ford+ is making us more resilient, efficient, and profitable, which you can see in Ford Pro’s breakout second-quarter revenue improvement (22%) and EBIT margin (15%).”
Ford said it “now expects to reach a 600,000-unit EV production run rate during 2024 and will maintain flexibility, balancing growth and profitability, on the way to attaining a two-million run rate.”
In Ford’s March report, the company announced it expected to lose $3 billion in its EV division.
According to Ford’s Chief Financial Officer John Lawler, “Ford Model E is an EV start-up within Ford and, as everyone knows, EV start-ups lose money while they invest in capability, develop knowledge, build volume and gain share,” he said.
Earlier this month, The Daily Fetched reported that unsold electric cars continue to pile up on dealer lots due to misjudgment of buyers’ demands.
With the increasing discrepancy between electric car supply and demand signals, there is a big looming public concern over buying an EV due to charging concerns and the hefty price tag.
As Axios reported, senior manager of economic and industry insights at Cox Automotive, Jonathan Gregory, linked the situation to the 1989 film Field of Dreams, which coined the phrase, “If you build it, he will come.”
Gregory said the car industry has now built its electric vehicles, but they are just waiting for the customers.
The Daily Fetched reported last year that Ford laid off 3,000 workers to save money while it ‘transitions’ to electric vehicles.
“The workforce reduction mostly targets employees in the U.S., Canada and India. About 2,000 of the targeted cuts will be salaried jobs at the Dearborn, Mich., automaker. The remaining 1,000 employees are working in contract positions with outside agencies, the company said at the time.