Ford losing $200K on every EV sold

Internal combustion models prop up huge losses in Ford USA’s electric vehicle business.

The Ford F-150 Lightning has not been a sales hit for the blue oval

Ford of America lost nearly $200,000 on every electric vehicle it sold in the first quarter of 2024, financial reports released by the company showed.

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In the first three months of 2024, Ford reported sales of 10,000 electric vehicles in the USA with revenue of US$100m ($153m), making for a loss of US$1.3b ($2b) – or US$130,000 ($200,000) per vehicle.

Ford’s American EV sales were down 20 per cent year-on-year, with revenue down 84 per cent in the same period. Revenue had been impacted by the EV ‘price wars’, Ford said, where manufacturers such as Tesla have been slashing sticker EV prices.

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In the USA, Ford currently sells three pure electric models – the F-150 Lightning electric pick-up truck, Mustang Mach-E SUV and E-Transit commercial van.

The Ford Mustang Mach-E has had its price dramatically cut

With its electric vehicle division burdened by huge R&D costs, Ford expects to lose a further US$4.5b ($6.9b) on EV sales for the full year. Ford planned to manufacture EVs at a rate of 600,000 per year by the end of 2023, but has since shifted that forecast into 2024 as domestic US demand for electric vehicles cools.

Torquecafe estimates the losses were mostly amortisation of the brand’s massive investment in EV R&D costs. Ford said it intends to have the sticker price of vehicles cover the actual build costs in the near-future.

The Blue Oval has its longer term EV profitability hopes partly pinned on a skunkworks team of engineers in California developing a cut-price, small electric vehicle platform. The new EV platform could form the basis of multiple models at higher volumes, and is hoped to compete against potential incoming waves of cheap, imported Chinese-made EVs.

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Despite its EV business making a loss, Ford posted a three per cent increase in total revenue for the quarter at US$42.8b ($65.5b), its EV arm being subsidised by consumer internal combustion vehicles and commercial vehicles. Ford USA sold 626,000 consumer vehicles in the first three months of 2024 for earnings before interest and tax (EBIT) of US$905m ($1.3b), while its commercial and government fleet division sold 409,000 vehicles for an EBIT of US$3b ($4.6b).

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Sales of hybrid Ford vehicles in the USA are on track to increase a substantial 40 per cent in 2024.

In Australia, Ford sold 181 electric Mustang Mach-Es in the first three months of 2024. In the same period, segment leader Tesla sold 6835 Model Ys. Ford dropped the price of the Mach-E by up to $7000 in December last year.