In the first quarter, Model e – Ford’s electric vehicle segment lost 1.3 billion USD, equivalent to 132,000 USD for each car sold.
On April 24, Ford said that in the first quarter of the year, they sold 10,000 electric vehicles, down 20% compared to the same period last year. Revenue from this segment also decreased by 84% to 100 million USD. The main reason is the price war in this industry, causing them to suffer a huge loss of 1.3 billion USD before taxes.
John Lawler – Ford’s Chief Financial Officer said the price war between electric vehicle manufacturers has been going on for nearly 2 years, making it very difficult to achieve profits. He said that although Ford has reduced costs by $5,000 per Mustang Mach-E, “sales are falling even faster.”
Ford CEO Jim Farley said the company is making some changes in the electric vehicle segment. Their next generation of cars could therefore be profitable.
A Ford Mustang Mach-E is charging in Spain in November 2023. Image: Reuters
Like most other traditional car manufacturers, Ford plans to switch from gasoline cars to electric cars in the next few years. However, they are the only car company to announce results for this segment alone. Data released yesterday showed that the profit pressure on the electric vehicle segment of Ford and other companies is currently very large.
Last year, the Model e segment lost 4.7 billion USD. The number of cars sold is 116,000 units.
However, not all electric vehicles Ford sells are included in the Model e. Some are classified as Ford Pro – the segment responsible for selling large volumes of vehicles to business and government customers.
Ford said the demand for electric vehicles in the Ford Pro segment is huge. They recently received an order for 9,250 E-Transit electric freight vehicles for the US Postal Service Company (US Postal Service). They also have an order for more than 1,000 F-150 Lightning and Mustang Mach-E electric pickups from Ecolab company.
However, Ford Pro mainly sells gasoline cars. Last quarter, this segment recorded pre-tax profit more than doubled, to 3 billion USD. Revenue increased 36% to $18 billion. The number of cars sold also increased by more than 20%, to 409,000 units.
Meanwhile, Ford Blue – which sells gasoline cars to consumers – suffered a 13% decrease in revenue, to $21 billion. The number of cars sold is 626,000 units. This segment generated a profit of 905 million USD.
Ford’s competitors in the electric vehicle segment have very different business results. General Motors this week said its electric vehicle segment in North America is on track to be profitable in the second half of this year. Stellantis – which owns the Jeep, Ram, Dodge and Chrysler brands – has had electric vehicle profits since last year.
Meanwhile, Tesla – the world’s largest electric car company – this week announced a 50% decrease in first-quarter profits. Revenue also decreased by 9% compared to last year.