(ConservativeJournal.org) – Ford is currently dealing with huge losses in the company, with debts extending beyond the money spent from producing and selling 10,000 electric vehicles. The company revealed it spent significant amounts of money in research and development for future electric vehicle (EV) models, a venture not expected to yield returns for years.
The losses are projected to persist in their EV selection, with Ford anticipating losses of $5 billion for the entire year. Amidst a price war among EVs from different companies, achieving even slight profitability remains a challenge. This makes balancing production costs with pricing very difficult for Ford.
In 2023, Ford “Model e” registered a loss of nearly $5 billion, with sales of 115,000 EVs averaging $40,500 per vehicle. Despite efforts to optimize costs, revenue decline outpaced cost reduction.
While “Model e” represents only a small number of overall Ford’s EV sales, its Ford Pro unit exhibits strong demand. Notably, the US Postal Service ordered 9,000 E-Transit vans. Significant orders from these lines of vehicles show that Ford can still recoup some losses. CEO Jim Farley asserts Ford’s commitment to restructuring its EV business, with the new EV lineup aiming for profitability. However, Ford Pro, specializing in internal combustion vehicles, remains a key profit driver. It is responsible for the majority of earnings for the company in the recent quarter.
Ford Blue, on the other hand, responsible for consumer sales of gasoline-powered cars, faces declining sales and revenue as well. Despite similar profit levels year-over-year between Ford Blue and Ford Pro, amplified losses in the “Model e” unit contributed to Ford’s overall decline of income.
In contrast, North American General Motors’ EV cars are set to be very profitable by the end of 2024. Stellantis reported profitability in its European EV business last year, while Tesla is lately struggling with smaller amounts of earnings.
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