In recent Ford news, the automotive giant has revealed that it expects its electric vehicle business to incur a loss of $3 billion in 2023. This comes despite the company forecasting increased profits from its internal combustion and commercial vehicle operations. Ford’s losses from its EV unit, Model e, are projected to rise by nearly 50 percent this year. Losses are attributed to the company’s investments in expanding production and developing next-generation Ford EVs on a dedicated platform.
Ford Earnings News
Ford announced that it anticipates around $7 billion in earnings before interest and taxes (EBIT) this year for Ford Blue, its internal combustion business unit, and about $6 billion for Ford Pro, its commercial unit. These units generated $6.8 billion and $3.2 billion in 2022, respectively, contributing to the company’s overall adjusted EBIT of $10.4 billion and a net loss of $2 billion.
It has long been assumed by analysts and investors that Ford’s traditional gasoline-powered vehicle business has been the primary driver of profits, helping to fund investments in Ford EVs and other mobility ventures. Thursday marked the first time Ford publicly disclosed the financial results of its three units, which were created in 2022. This new financial reporting method no longer details regional performance, such as North America, Europe, and China.
Ford’s electric vehicles, such as the popular Mustang Mach-E, are currently facing losses, which Lawler explained are to be expected. “Ford Model e is an EV startup within Ford. As everyone knows, EV startups lose money while they invest in capabilities, develop knowledge, build volume and gain share.” The increased losses this year are attributed to investments in building manufacturing complexes in Tennessee and Kentucky, as well as exploring alternative battery chemistries.
Ford EVs? Full Steam Ahead
Despite these challenges, Lawler assured that Ford would be “approaching contribution margin break even” on EVs by the end of this year. Ford aims to achieve a production capacity of 600,000 EVs annually by the end of 2023. They’re targeting the ability to build 2 million Ford EVs per year by 2026.
In the meantime, the Ford Pro unit expects to nearly double its earnings this year as it prepares to launch a new Super Duty line of pickups and increase output of its E-Transit van. Lawler said, “Ford Blue and Ford Pro are both solidly profitable today and well-positioned for growth.”
Ford’s Electric Vehicle Lineup Is Growing
Price: $57,896 – $98,869+
The 2023 Ford F-150 Lightning is an impressive electric pickup truck with a powerful 580 horsepower Extended-Range battery that can hit 60 mph in just 4.0 seconds. With a sleek design that closely resembles its gasoline-powered counterpart, the Lightning offers EPA-estimated driving ranges of 230 to 320 miles, depending on the battery pack. However, towing can significantly impact range and charging frequency. Despite these limitations, the F-150 Lightning remains an ideal choice for truck owners who tow infrequently or for short distances. This year, the Lightning’s price has increased dramatically due to supply-chain constraints, rising material costs, and market demand, with entry-level Pro models seeing a $12,000 hike and higher-end trims experiencing increases between $6,000 and $7,000.
Ford Mustang Mach-E
Price: $47,495 – $77,195
The 2023 Ford Mustang Mach-E, priced between $47,495 and $77,195, is a versatile electric crossover offering numerous configurations and equipment packages to suit various preferences. Buyers can choose between the feature-rich Premium model or the high-performance GT. While it may not be a traditional Mustang, the Mach-E boasts impressive agility, speed, and style, as well as a well-equipped interior. Driving range is above average at over 300 miles for some trims. It won Car and Driver’s EV of the Year award in 2021. For the 2023 model year, the Premium trim’s estimated range increases to 290 miles. Ford’s Co-Pilot360 driver-assistance technology now comes standard across the lineup. The new Mustang Nite Pony package is available for selected Premium and GT Performance Edition models.
The 2023 Ford E-Transit is an all-electric cargo van designed to enhance productivity for commercial customers. It comes in eight different configurations, including three roof heights and three body lengths, as well as cutaway and chassis cab versions. The E-Transit offers a targeted range of 126 miles for the low-roof cargo van configuration, based on a 68 kWh usable battery capacity. This electric workhorse is part of Ford’s strategy to invest over $30 billion in electrification through 2025. The E-Transit is ideal for fleet operators looking for lower maintenance costs and eco-friendly operations.
Ford expects a $3 billion loss in its electric vehicle business in 2023, despite increased profits from traditional vehicle divisions. These losses are attributed to investments in manufacturing complexes and alternative battery chemistries. Ford remains confident in achieving breakeven contribution margin on EVs by year-end. With a growing EV lineup, Ford aims to enhance productivity for customers while supporting environmentally conscious operations. Despite current challenges, the automaker is investing $30 billion in electrification through 2025.