Ford Motor Company projects that its electric vehicle (EV) division will incur losses between $5 billion and $5.5 billion this year, mirroring last year’s financial performance.
On Saturday, Fox News reported that Ford’s Chief Financial Officer, Sherry House, stated the company anticipates an EBITDA loss of $5 billion to $5.5 billion in its EV division, Model e, for this year.
Ford’s EV division Model e reported an EBITDA loss of $5.1 billion in the previous year.
Ford expects its commercial vehicle division, “Ford Pro,” to generate profits between $7 billion and $8 billion. Its internal combustion engine division, “Ford Blue,” is projected to earn between $3.5 billion and $4 billion.
House commented that despite ongoing pricing pressures in the industry, Ford plans to significantly boost its global sales by leveraging its European market launch. She noted that the company has substantially increased investments in battery facilities and next-generation vehicles, slated for release within the next two years.
She noted that while EV sales have increased, costs associated with the BlueOval SK battery plant (BOSK) in Kentucky and second-generation EV engineering have added an extra $1 billion in expenses. BOSK is a joint venture battery plant established by South Korea’s SK On and Ford in July 2022.
House explained that some of the ongoing pricing pressure could potentially impact Ford’s European and North American markets. However, she noted that sales of the Mustang Mach-E in the fourth quarter of last year increased by 30% compared to the previous quarter, maintaining above-average pricing.
Fox News reported that Ford’s announcement comes as automakers face challenges in 2024, including weaker-than-anticipated consumer demand for EVs and increased pricing pressure from competitors.
Unlike Ford, General Motors (GM) does not separately report sales and financial figures for its EV division. GM executives stated that their electric vehicles generated more sales revenue last year than labor and raw material costs, achieving a “positive variable profit.”
This figure excludes fixed costs such as assembly line setup. Last year, GM sold 189,000 EVs in the North American market, falling short of its 200,000-unit target.
