Shouldn’t the shareholders intervene at some point?
Last time I checked in, Ford had lost billions making electric ‘cars’ that no one wants.
“Ford reported that it’s going to lose $3 billion on electric cars in 2023. Unlike most automakers, Ford reports its electric vehicle numbers separately, but experts estimate that most car companies are losing similar amounts on the dead end business.”
“Ford plans to make 2 million electric cars every year by 2025. That would be impressive considering that Ford only sold 61,575 of them in 2022. It sold 3,624 electric vehicles in Feb 2023.”
Ford said the higher loss projection for Ford Model e reflected “the pricing environment, disciplined investments in new products and capacity, and other costs.” Ford also now expects to reach a 600,000-unit EV production run rate during 2024, instead of the end of this year, on the way to achieving a 2 million annual run rate.
Earlier this year, Ford issued press releases hyping 285,291 sales in 2024. This is far short of its projections, but at least it’s growth.
The actual numbers however were under 100,000 actual EVs sold while 187,000 or so were hybrids.
All of this was dwarfed by over 1.7 million in actual cars sold.
How much did this incredible ‘success’ story with EVs cost Ford? $5 Billion. No, Ford didn’t make $5 billion selling EVs. It lost $5 billion.
Ford’s electric vehicle and software business lost $5.1 billion in 2024, up from $4.7 billion lost in 2024. And the automaker doesn’t anticipate any relief this year, when it predicts it will lose as much as $5.5 billion on its EV business.
To be sure, Ford’s gas cars are still doing great, continuing to bring in enough revenue for the company to end the year in the black. The company reported a full-year net income of $5.9 billion and an adjusted earnings of $10.2 billion.
In short, Ford is using its actual car business to finance a ‘progressive’ money-losing electric car business. And it’s doubling down.
Enjoy the Axios distillation of Ford’s rationale.
More and more mainstream car buyers can’t afford to buy a new Ford, which sells for an average of $56,000.
At the same time, Chinese carmakers have figured out how to make inexpensive, high-quality, digitally advanced EVs, and they’re quickly taking over the world.
It’s only a matter of time before those Chinese cars arrive in the U.S.
Building affordable EVs profitably is a lot harder without consumer tax credits and other EV-friendly policies killed by the Trump administration.
Let me see if I get this straight.
Ford’s cars are too expensive for American consumers. So Ford is going to dive into EVs, which are even more expensive, and Ford needs to dive in before the Chinese start importing cheap EVs and destroy the business it lost some $20 billion developing?
I’ve seen better business arguments for MLM schemes.
At some point Ford’s shareholders need to intervene before the money runs out and the progressive politics kills another great American company.
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