The Ford Motor Company’s EV losses are far outpacing the company’s already low expectations.
Early predictions suggested the company would lose up to $3 billion on EVs in 2023.
But now, according to a Thursday news release, that number has grown to a staggering $4.5 billion.
The first few pages of the report boast of the company’s increases in EV revenues.
For example, the company noted the hybrid Ford Blue has earned $2.3 billion before interest and taxes and overall Ford Model e (the company’s EV division) revenue has grown by 39 percent from the previous year.
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Buried over halfway down the fourth page, however, is the true state of the company.
“For its transparent, customer-centered business units, Ford now expects full-year [earnings before interest and taxes]… To be a loss of about $4.5 billion for Ford Model e, reflecting the pricing environment, disciplined investments in new products and capacity, an other costs,” the release reads.
Ford has already made adjustments in order to account for these losses. For example, according to Fortune, last week Ford cut the prices on some of its EVs, including the F-150 Lightning electric pickup truck.
Granted, this isn’t necessarily a disaster scenario for the company.
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Based on the report’s overall language, Ford expects revenues to continue their slow growth until its EV division is fully profitable.
“The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford,” Farley said, according to the release.
“[W]hile others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away.”
That said, to see projected losses grow from $3 billion to $4.5 billion over a few months is no small thing.
Only time will tell if the automotive manufacturer’s optimism in its EV division pans out.
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Going forward, Biden administration policy may play a large role in easing Ford Model e’s losses.
In late-2021, the administration announced its plan to end the government’s purchasing of gas-powered vehicles by 2035, according to Reuters.
All in all, the government buys roughly 50,000 vehicles each year and owns over 650,000.
Ford is transitioning to selling more EVs on a similar timeline.
According to The New York Times, by 2030 the automotive company is aiming for EVs to make up roughly half of all Ford sales.
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