Ford sees $3 billion loss on electric vehicles this year
Breanne Deppisch
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Ford said on Thursday it expects its electric vehicle business to lose roughly $3 billion in 2023, an obstacle it said will not prevent it from reaching its profit goals for 2026.
The estimate comes as Ford seeks to provide more transparency into the finances of its EV business compared to traditional gas-powered vehicles, as well as its fleet of commercial vehicles.
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Ford also unveiled a new financial reporting format, which it will begin using on May 2, when it releases its first quarter earnings report. This will include a breakdown of financial results by business units rather than region — providing earnings data for its “Ford Blue,” or the traditional ICE-powered vehicle; its “Model e” electric vehicles; and its “Pro” commercial vehicles and services, officials said in a call with investors and analysts on Thursday.
That’s “how we’re running the company now,” Ford CFO John Lawler said Thursday.
Ford projects that the Model e cumulative three-year loss between 2021 and 2023 will total about $6 billion.
In 2022, Ford said its EV division losses totaled $2.1 billion, up from the $900 million losses it reported in that sector in 2021.
Lawler attributed the losses to its new EV investments, including battery cell factories in two U.S. states.
Ford executives have said on more than one occasion that they view its relatively nascent EV operation as a startup — at least when compared to its more than 100-year history in producing traditional, gas-powered vehicles.
“Startups lose money as they invest in capability, develop knowledge, build volume, and gain share,” Lawler told reporters.
Officials also said Thursday that Ford remains on track to reach its target of a pretax margin of 8% by late 2026, or 10% adjusted for earnings before interest and taxes.
Ford CEO Jim Farley said last year he would split the company’s EV business from its traditional ICE-powered vehicle division in an effort to speed up EV development. In June, Ford was reportedly planning to lay off as many as 8,000 employees from its Ford Blue division — or the unit that produces its ICE-powered vehicles — to further bolster investments in the EV sector.
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Lawler told reporters Thursday that Ford will have the global capacity to build out some 600,000 EVs by the end of the year and 2 million EVs by the end of 2026.
We “intend to fully use that capacity,” he said.