- Ford expects to lose roughly $3 billion from the electric-vehicle arm of the company this year.
- The increased losses are expected due to money being spent on manufacturing facilities in Tennessee and Kentucky, as well as the addition of alternate battery chemistries.
- Ford issued the bleak forecast in a Thursday morning call with reporters.
Ford is projecting an increase in losses from its EV unit, labeled Model e, up from $2.1 billion last year to total nearly $3 billion in 2023. The increase in losses is expected to come even as sales of the Mustang Mach-E electric crossover and F-150 Lightning full-size electric pickup truck grow and the company invests further in increased production.
The forecast came in a Thursday morning call with reporters where Ford outlined a new financial-reporting structure. The company announced a new reporting structure broken into Ford Blue (gas/hybrid vehicles), Ford Model e (breakout EVs), and Ford Pro (commercial vehicles).
“We’ve essentially ‘refounded’ Ford, with business segments that provide new degrees of strategic clarity, insight and accountability to the Ford+ plan for growth and value,” CFO John Lawler said. “It’s not only about changing how we report financial results; we’re transforming how we think, make decisions and run the company, and allocate capital for highest returns.”
Losses from the EV division will be covered by an expected increase in profits for the other two Ford divisions, with Lawler projecting $7 billion in earnings before interest and taxes this year for Ford Blue, and roughly $6 billion for Ford Pro. Speaking to reporters, Lawler explained the reasoning behind the expected losses for the Model e arm of the business.
“Ford Model e is an EV startup within Ford,” he said. “As everyone knows, EV startups lose money while they invest in capabilities, develop knowledge, build volume, and gain share.”
Those mounting losses will come as Ford continues to invest in ramping up EV production numbers. The company is planning the construction of two new battery-cell factories in Kentucky and a third in Tennessee, along with the $3.5 billion lithium-iron-phosphate battery plant it will build in Marshall, Michigan.
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Associate News Editor
Jack Fitzgerald’s love for cars stems from his as yet unshakable addiction to Formula 1.
After a brief stint as a detailer for a local dealership group in college, he knew he needed a more permanent way to drive all the new cars he couldn’t afford and decided to pursue a career in auto writing. By hounding his college professors at the University of Wisconsin-Milwaukee, he was able to travel Wisconsin seeking out stories in the auto world before landing his dream job at Car and Driver. His new goal is to delay the inevitable demise of his 2010 Volkswagen Golf.
Source: Motor - aranddriver.com
