Ford Is Losing Way More Money On EVs Than You Might Expect, But It Isn't All Bad News
Despite experiencing a sales decline and suffering significant losses in its EV (Electric Vehicles) business, things are looking promising for American automaker Ford. The company recently released its earnings report for the first quarter of 2024, in which it revealed that the company's EV division — also referred to as Ford Model e — suffered losses amounting to $1.3 billion. The company blamed increasing competition in the EV space and the resulting price war as one of the reasons for this decline. However, the company reiterated its commitment to the EV space while adding that it expects the EV business to fare better in the future.
Things aren't as gloomy when it comes to the rest of Ford's core business lines. The company's commercial vehicles business — Ford Pro — reported revenues of $18 billion in Q1, 2024, a massive 36% growth year-on-year, on the back of a 21% increase in sales. The company's traditional business line — Ford Blue — reported revenues of $21 billion, a 13% rise during the same period last year. Sales also rose 11% during the same period. Things are also looking positive for Ford's hybrid vehicles — sales of which jumped by 36%. The company expects the growth to continue in the segment and foresees a 40% growth by the end of 2024.
Ford's revenue as a whole for the first quarter of 2024 reached $42.8 billion, which is a respectable 3% growth year-over-year despite a slight dip in overall sales. The company also reported a net income of $1.3 billion in the same period.
What to expect from Ford in 2024
The troubles faced by Ford with the company's EV division were something that Ford themselves had predicted. In February 2024, Ford released its 2024 Guidance, in which the company revealed that it expects to lose roughly $5 billion in their EV business in 2024. The current numbers are in line with the prediction.
Additionally, according to Ford's Chief Financial Officer (CFO) John Lawler, Ford is on the path to hitting earning figures hovering between $10 billion and $12 billion. The company also plans to spend anywhere between $8 billion and $9 billion as capital expenditure, which broadly encompasses research and development, and possibly acquiring new physical assets, including property and industrial buildings. This company is also looking to cut costs by up to $2 billion by streamlining internal processes and reducing costs in areas like materials, freight, and manufacturing.
While Ford is looking forward to further expansion of its EV business, the rising popularity of the company's hybrid vehicles resulted in the Ford Maverick becoming the most-sold Hybrid truck in the U.S. The company is eager to achieve similar success with the hybrid version of the Ford F-150 truck, which should reach customers shortly.