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Ford’s Total EV Sales Post $1.3 Billion Loss in Q1
April 25, 2024
Ford’s electric vehicle (EV) division, known as Model e, faced a tough start to 2024. The unit reported a staggering loss of $1.3 billion for the first quarter, equating to a loss of $132,000 for each of the 10,000 EVs it sold during this period. This significant loss impacted Ford’s overall earnings for the quarter.
Sales for the Model e unit dropped by 20% compared to the same period last year, with 10,000 EVs sold. Revenue took a sharp 84% dive, landing at approximately $100 million. Ford attributed this decline mainly to industry-wide price reductions on EVs.
Ford’s chief financial officer, John Lawler, highlighted the challenges faced by the EV market due to a price war that has been ongoing for about a year and a half. Despite efforts to cut costs, Lawler noted that revenue is decreasing at a faster rate than costs can be reduced.
In 2023, the Model e unit reported an annual loss of $4.7 billion, with an average loss of $40,525 per vehicle. However, it’s worth noting that the Model e unit doesn’t account for all of Ford’s EV sales. Some sales are handled by the Ford Pro unit, which focuses on fleet sales to businesses and government agencies.
Ford Pro, which primarily sells traditional internal combustion vehicles, performed well in the first quarter. The unit reported earnings before interest and taxes (EBIT) of $3 billion, more than double compared to the previous year. Revenue for Ford Pro increased by 36%, reaching $18 billion, with vehicle sales up by 21% to 409,000.
On the other hand, Ford’s consumer-focused unit, Ford Blue, experienced a decline in sales and revenue. Sales dropped by 11% to 626,000 vehicles, while revenue decreased by 13% to $21 billion. This led to a significant drop in EBIT for Ford Blue, falling by almost two-thirds to $905 million.
Despite the challenges faced by the Model e unit, Ford CEO Jim Farley remains optimistic. He mentioned that the company is making strategic changes in its EV business, and upcoming generations of EVs are expected to be profitable.
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