We have received official information detailing the financial losses Ford incurs with each new Ford electric car it sells. This revelation sheds light on the significant challenges the automaker faces in the competitive electric vehicle market.
In Ford’s first-quarter 2024 earnings report, announced on April 24, the American company reported a net income of $1.3 billion USD, equivalent to 4.875 billion Saudi Riyals. While this is a substantial amount, the profits could have been significantly higher if not for the struggles of Ford electric cars. These financial challenges underscore the difficulties traditional automakers encounter as they transition to electric mobility.
The Model e division, which encompasses all of Ford’s all-electric vehicles, posted losses equal to the company’s total gains. According to Bloomberg, Ford currently loses $100,000 USD, or 375,000 Saudi Riyals, on each new Ford electric car sold. This stark figure highlights the immense financial strain associated with producing and marketing electric vehicles, even for a well-established automaker like Ford.
Ironically, Ford electric car sales surged by 86% in the first three months of this year. However, this segment still represents a small fraction of Ford’s overall portfolio, with total sales of only 20,223 new vehicles. Despite the impressive growth, the scale of electric vehicle sales is still relatively minor compared to the company’s traditional gasoline-powered models.
The Ford electric vehicles contributing to these sales include:
- Ford Mustang Mach-E: The best-selling Ford electric car in the first quarter of this year, with 9,589 units sold.
- Ford F-150 Lightning: Ford’s electric pickup truck, which aims to combine the utility of the traditional F-150 with the benefits of electric power.
- Ford E-Transit: An electric version of Ford’s popular Transit van, designed for commercial use.
The Ford Mustang Mach-E stands out as a significant player in the electric vehicle market, being the top-selling Ford electric car in the first quarter of this year. Despite selling 9,589 units, this figure pales in comparison to the 152,943 units sold of Ford’s F-Series trucks in the same period. This disparity highlights the ongoing consumer preference for traditional models, even as electric vehicles gain traction.
Due to lower demand for electric vehicles compared to gasoline-powered cars, Ford has already slowed down the production of its electric models. Bloomberg reports that the company is reducing orders with battery suppliers and seeking other ways to offset the financial losses from its all-electric Model e range. This strategic adjustment reflects the complexities and uncertainties involved in scaling up electric vehicle production.
This shift in focus isn’t unique to Ford. The Stellantis Group, which owns brands such as Dodge, Jeep, Ram, Maserati, and Alfa Romeo, has recently shown a willingness to produce combustion versions of electric vehicles if demand exists. Similarly, Mercedes-Benz has expressed doubts about its electric vehicle strategy, and GM is facing challenges with its Ultium platform. These examples illustrate a broader industry trend where traditional automakers are reevaluating their electric vehicle strategies amidst fluctuating market conditions.
This report highlights the financial challenges Ford faces with its Ford electric car sales. As the automotive industry continues to evolve, the financial viability of electric vehicles remains a critical issue. While the push towards electrification is essential for environmental sustainability, automakers must navigate the economic realities to ensure long-term success. Ford’s experience serves as a valuable case study in understanding the intricate balance between innovation, market demand, and financial performance in the rapidly changing landscape of the automotive industry.
