Ford Motor Company is projected to incur a massive $4.5 billion loss from its electric vehicle (EV) division, known as “Ford Model e,” this year, up from the previous estimate of $3 billion. The company’s second-quarter financial results revealed that the EV division has already lost $1.8 billion in 2023. This projected loss is more than double the $2.1 billion loss incurred by Model e in 2022.
Despite the substantial losses, Ford remains optimistic about its EV business. The company recently announced a price reduction for its electric F-150 Lightning pickup trucks due to cheaper battery materials. Ford emphasized its low EV prices, which they believe will establish leadership ahead of the industry’s next-generation EVs. The company reported a 39% increase in Ford Model e’s revenue and aims to produce 600,000 EVs annually by 2024.
Ford’s CEO, Farley, acknowledged that the pace of EV adoption may be slower in the near term but expressed confidence in early movers like Ford. The company believes that EV customers are brand loyal, contributing to their success in the EV market. Ford is investing in capabilities and capacity worldwide, and they have next-generation products in advanced development.
While the losses in the EV division are significant, Ford continues to generate substantial revenue from other parts of its business. In the second quarter, the company recorded $45 billion in revenue and a net income of $1.9 billion.
Ford’s financial results for the third quarter of 2023 will be announced on October 26. The company views Ford Model e as an EV startup within the larger Ford corporation, and they anticipate losses as they invest in capabilities, develop knowledge, and build volume and market share in the competitive EV market.
