Ford expects to lose $3 billion on EVs this year

[Harley Lover]

Now that Ford are breaking out results for Ford Blue, EVs, and Ford Pro, interesting info is coming to light: 

Quote

Ford Motor Co. expects its electric vehicle business to lose $3 billion this year, even as it forecasts increased profits on its internal combustion and commercial vehicle operations.

The automaker on Thursday projected that losses from its EV unit, called Model e, will increase nearly 50 percent in 2023 from $2.1 billion last year as it continues to invest in boosting production and developing next-generation products on a dedicated EV platform. Ford said it expects about $7 billion in earnings before interest and taxes this year for Ford Blue, its internal combustion business unit, and about $6 billion for Ford Pro, its commercial unit.

Those units made $6.8 billion in 2022 and $3.2 billion in 2022, respectively. Overall, the company posted adjusted EBIT of $10.4 billion and $2 billion net loss.

Quote

Thursday marked the first time Ford has publicly broken out results for the three units, created as part of a companywide reorganization in 2022, as it changes its financial reporting method. The new way of reporting no longer details how the company did in different regions of the world, such as North America, Europe and China.

"By changing our organization and how we're reporting financial results, we're operating with increased focus, speed and accountability," CFO John Lawler said in a call with reporters.

Quote

Lawler, speaking to reporters, said near-term EV losses are to be expected.

"Ford Model e is an EV startup within Ford," he said. "As everyone knows, EV startups lose money while they invest in capabilities, develop knowledge, build volume and gain share."

The losses are expected to increase this year because of the money being spent to build manufacturing complexes in Tennessee and Kentucky and to offer alternative battery chemistries, he said.

Still, Lawler said Ford would be "approaching contribution margin breakeven" on EVs by the end of this year. The automaker expects to reach production capacity of 600,000 EVs annually by the end of this year and be able to build 2 million a year by 2026.

Lawler said the Ford Pro unit is expected to nearly double its earnings this year as it prepares to launch a new Super Duty line of pickups and boost output of its E-Transit van.

"Ford Blue and Ford Pro are both solidly profitable today and well-positioned for growth," Lawler said.

 

Ford's ability to essentially 'internally finance' its EV ambitions is very important, especially right now. There is an article out today explaining how the failure of SVB in California is putting the squeeze on EV startups because its failure eliminated a source of capital for those ventures - a market in which capital sourcing was/continues to atrophy.

 

https://www.autonews.com/automakers-suppliers/fords-ev-losses-2-billion-2022-3-billion-expected-2023?utm_source=breaking-news&utm_medium=email&utm_campaign=20230323&utm_content=hero-headline

[Joe771476]

The general public does NOT want EV's!

[T-dubz]

I think ford is being a bit optimistic with their projections. 600k evs this year and 2 mil by 2026? Through Feb this year they only sold 8,770 electric vehicles. Even including hybrids doesn’t get them anywhere close to 600k this year.

 

 

[akirby]

1 hour ago, Joe771476 said:

The general public does NOT want EV's!

Sales and reservations disagree.

[rmc523]

5 hours ago, T-dubz said:

I think ford is being a bit optimistic with their projections. 600k evs this year and 2 mil by 2026? Through Feb this year they only sold 8,770 electric vehicles. Even including hybrids doesn’t get them anywhere close to 600k this year.

 

 

 

That figure was production capacity of 600k per year end of this year and 2M by 2026, not sales.

 

Plus, I'd assume that figure is global, not NA only.

 

Also, I think they're using specific language - that doesn't mean they will have produced 600k this year.....it means they'd have the capacity/cabability to produce that many if they wanted to.....

Edited March 23, 2023 by rmc523

[Rick73]

A distinction without a difference if BEV demand materializes, exceeding all reasonable capacity estimates.

[tarheels23]

 

8 hours ago, Joe771476 said:

The general public does NOT want EV's!

https://www.reuters.com/technology/one-third-americans-would-consider-ev-purchase-reutersipsos-poll-2023-03-21/

 

 this poll disagrees with you, from the poll:

 

The seven-day poll completed on Monday found 34% of all respondents would consider an EV, while 31% said no. Among Democrats, 50% said they would consider an EV, while 26% of Republicans and 27% of independents said they would consider it.

 

There are now more than 80 EV models for sale in the United States. EVs represented nearly 6% of all U.S. sales in 2022, with EV sales up by more than 60% last year.

[mackinaw]

The Reuters poll is hardly a ringing endorsement for EV's.  You could just as easily stress the negative, e.g. "74% or Republicans, and 73% of independents said they would not consider an EV."

[akirby]

31 minutes ago, mackinaw said:

The Reuters poll is hardly a ringing endorsement for EV's.  You could just as easily stress the negative, e.g. "74% or Republicans, and 73% of independents said they would not consider an EV."

Considering the limited choices and high prices right now and the cost of a home charger I think that’s a healthy percentage.

[tarheels23]

1 hour ago, tarheels23 said:

 

https://www.reuters.com/technology/one-third-americans-would-consider-ev-purchase-reutersipsos-poll-2023-03-21/

 

 this poll disagrees with you, from the poll:

 

The seven-day poll completed on Monday found 34% of all respondents would consider an EV, while 31% said no. Among Democrats, 50% said they would consider an EV, while 26% of Republicans and 27% of independents said they would consider it.

 

There are now more than 80 EV models for sale in the United States. EVs represented nearly 6% of all U.S. sales in 2022, with EV sales up by more than 60% last year.

If 34% was extrapolated to all CAR owners in the US then F had better start building more EV and battery factories, don't you think 

[bzcat]

9 hours ago, T-dubz said:

I think ford is being a bit optimistic with their projections. 600k evs this year and 2 mil by 2026? Through Feb this year they only sold 8,770 electric vehicles. Even including hybrids doesn’t get them anywhere close to 600k this year.

 

 

 

600k annualized rate by end of this year. Which means that Ford expects to produce or sell 50k EV a month by end of this year. And that number is global not US.

 

Ford is expecting a ramp up of Mach E and Transit Custom EV sales this year. Plus the EU Explorer should hit the road in Q3. 

[Rick73]

3 hours ago, tarheels23 said:

If 34% was extrapolated to all CAR owners in the US then F had better start building more EV and battery factories, don't you think 

That 34% of potential buyers “will consider” BEV doesn’t mean 34% will buy BEV as next vehicle.  Much also depends on how question was worded.  Not that I’m against BEVs — just stating poll limitations.

 

I drove a BEV today for first time and liked the electric powertrain a lot.  It was quiet, fast, smooth, and especially very energy efficient which really impressed me.  It was more efficient at lower speeds than I expected.

 

If the car was a little cheaper, and was more conventional in that everything didn’t feel like a computer on wheels, I’d consider as a second car.  Range and very fast charging could also make it a primary car for road trips, but I seriously doubt I would buy for that purpose.  For local use it’s a definite possibility.

 

By the way, at present $3.00 per gallon for regular gas (my area), a Toyota Prius would be cheaper for fuel at highway speeds, and the Tesla a little cheaper in city driving when charging at home.  Overall, fuel versus electricity cost differences are essentially almost insignificant.  I’ll consider a BEV as next local vehicle, but not certain either way.  It’s likely many who said “will consider” are in same boat.

[T-dubz]

3 hours ago, bzcat said:

 

600k annualized rate by end of this year. Which means that Ford expects to produce or sell 50k EV a month by end of this year. And that number is global not US.

 

Ford is expecting a ramp up of Mach E and Transit Custom EV sales this year. Plus the EU Explorer should hit the road in Q3. 

There’s just no way that happens. The last world wide ford sales I could find were 4 million in 2021. So ford thinks half of all their sales will be EVs in just 3 years (2mil by 2026)? For reference Tesla sold just under a million worldwide in 2021. I’d be surprised if all of ford’s EV sales from now until 2030 reach one million. hopefully I’m wrong.

I know it’s production capacity, but why rush the capacity if you aren’t planning to use it.

Edited March 24, 2023 by T-dubz

[tarheels23]

9 hours ago, Rick73 said:

That 34% of potential buyers “will consider” BEV doesn’t mean 34% will buy BEV as next vehicle.  Much also depends on how question was worded.  Not that I’m against BEVs — just stating poll limitations.

 

I drove a BEV today for first time and liked the electric powertrain a lot.  It was quiet, fast, smooth, and especially very energy efficient which really impressed me.  It was more efficient at lower speeds than I expected.

 

If the car was a little cheaper, and was more conventional in that everything didn’t feel like a computer on wheels, I’d consider as a second car.  Range and very fast charging could also make it a primary car for road trips, but I seriously doubt I would buy for that purpose.  For local use it’s a definite possibility.

 

By the way, at present $3.00 per gallon for regular gas (my area), a Toyota Prius would be cheaper for fuel at highway speeds, and the Tesla a little cheaper in city driving when charging at home.  Overall, fuel versus electricity cost differences are essentially almost insignificant.  I’ll consider a BEV as next local vehicle, but not certain either way.  It’s likely many who said “will consider” are in same boat.

I have a 2013 C-Max with 110K so I accept that today's hybrid fits better but I expect within 3-5 years when we expect to buy our next car, BEV will meet the needs of most owners.

 

ETA: to your last paragraph I get better than 65 MPG @ 35 MPH and ~45 MPG @ 65 MPH and I have read that electricity versus gas is ~ $1.30 per gal so I do not understand your comparisons.

Edited March 24, 2023 by tarheels23

[silvrsvt]

44 minutes ago, tarheels23 said:

I have a 2013 C-Max with 110K so I accept that today's hybrid fits better but I expect within 3-5 years when we expect to buy our next car, BEV will meet the needs of most owners.

 

That is what alot people get tripped up on...a hybrid might work better at this very moment if you need to buy a car, but not to expect BEVs and charging infrastructure to not improve in the next five years either is downright stupid. 

[Rangers09]

10 hours ago, Rick73 said:

That 34% of potential buyers “will consider” BEV doesn’t mean 34% will buy BEV as next vehicle.  Much also depends on how question was worded.  Not that I’m against BEVs — just stating poll limitations.

 

I drove a BEV today for first time and liked the electric powertrain a lot.  It was quiet, fast, smooth, and especially very energy efficient which really impressed me.  It was more efficient at lower speeds than I expected.

 

If the car was a little cheaper, and was more conventional in that everything didn’t feel like a computer on wheels, I’d consider as a second car.  Range and very fast charging could also make it a primary car for road trips, but I seriously doubt I would buy for that purpose.  For local use it’s a definite possibility.

 

By the way, at present $3.00 per gallon for regular gas (my area), a Toyota Prius would be cheaper for fuel at highway speeds, and the Tesla a little cheaper in city driving when charging at home.  Overall, fuel versus electricity cost differences are essentially almost insignificant.  I’ll consider a BEV as next local vehicle, but not certain either way.  It’s likely many who said “will consider” are in same boat.

 

Totally agree, and I'm surprised only 34% will consider a BEV.

 

When making a substantial purchase decision, I consider all reasonable options, at least initially. Last year, when purchasing the F-450, a BEV wasn't an option, but this year when replacing DW's Escape, we did initially consider a BEV. Since current BEV technology and available models don't meet our needs, the probability of us purchasing a BEV is zero, so we ordered a 2023 Escape PHEV.

 

As with most surveys, you can generally receive the desired result by tailoring the question accordingly. With respect to this survey, we would have responded that we considered a BEV, so would be included in the 34%. However, that is not a true indication of future sales, as I expect many others that responded as having considered a BEV, will also have a low probability of actually purchasing one.

[Chrisgb]

14 hours ago, mackinaw said:

The Reuters poll is hardly a ringing endorsement for EV's.  You could just as easily stress the negative, e.g. "74% or Republicans, and 73% of independents said they would not consider an EV."

The poll had 4410 respondents, which is a minute percentage of the populace that will buy a new vehicle this year of any type. The Reuter's article just says it was an online poll, not necessarily targeted at prospective new vehicle buyers. But still, it suggests that while only around 6% of sales are BEV's, 34% of the sample said they would consider one for their next purchase. That to me indicates that there is a healthy demand; one out of six"maybes" actually pull the trigger. The article didn't say whether there was a query about charging times in the poll, but my threshold is 300 mi range on a 10 minute charge, regardless of the total range. 

[Rangers09]

1 hour ago, tarheels23 said:

I have a 2013 C-Max with 110K so I accept that today's hybrid fits better but I expect within 3-5 years when we expect to buy our next car, BEV will meet the needs of most owners.

 

ETA: to your last paragraph I get better than 65 MPG @ 35 MPH and ~45 MPG @ 65 MPH and I have read that electricity versus gas is ~ $1.30 per gal so I do not understand your comparisons.

 

Using the smaller US gallon, the equivalent electricity is considered to be 33.7kWh, as per the EPA.  In BC we have some of the lowest residential electricity prices starting at 9.5 cents per kWh, increasing to 14.08 cents per kWh. The average per household is approximately 12 cents per kWh.

 

At the lower base rate, the equivalent is CAN $3.20 per US gallon, with the cost increasing to CAN $4.04 when considering the average cost per kWh. I expect many US states pay more per kWh than we do.

[Rick73]

1 hour ago, tarheels23 said:

ETA: to your last paragraph I get better than 65 MPG @ 35 MPH and ~45 MPG @ 65 MPH and I have read that electricity versus gas is ~ $1.30 per gal so I do not understand your comparisons.

I have been paying $2.79 to $2.89 lately, but let’s say $3.00 per gallon.  At 50 MPG city or highway for a Prius (or similar) which appears realistic, that works out to around $0.06 per mile.

 

The Tesla 3 at highway speed was using ~ 280 Wh per mile, or traveling 3.57 miles per kWh.  Stopping at a Supercharger cost $0.34 per kWh, which is $0.095 per mile.  My conclusion is that long highway trips requiring charging away from home is unlikely to save much on energy costs, if any.

 

Lower speed driving (mostly <60 MPH without too many stops) combined with home charging favors the Tesla though.  A trip from owners home to mine averaged 184 Wh per mile, or 5.4 miles per kWh.  That’s really efficient but not representative of typical city driving.  City driving was closer to 220 Wh per mile, which is still excellent.  At this energy consumption and my $0.20 per kWh rate at home, it would cost me $0.044 per mile.  That’s lower than a Prius or similar 50 MPG vehicle at $3.00/gallon, but doesn’t add up to much.

 

Bottom line is that there isn’t much savings to be had for me, and as a percent of total vehicle ownership costs, not important enough for me to worry about energy costs when choosing a vehicle.  Obviously, choosing a BEV that only travels 2 miles per kWh or an ICE vehicle that only gets 20 MPG makes huge difference, as would paying $5.00/gallon or buying electricity at $0.05/kWh.  Everybody has different needs and conditions.

[blwnsmoke]

On 3/23/2023 at 11:03 AM, akirby said:

Sales and reservations disagree.

 

Reservations are not sales.  And there are far more fuel powered vehicles being sold then EVs.

[fordmantpw]

11 hours ago, blwnsmoke said:

 

Reservations are not sales.  And there are far more fuel powered vehicles being sold then EVs.

 

And there are more Big Macs being sold than Five Guys burgers.  That doesn't mean that people don't want Five Guys burgers and it doesn't mean Big Macs are better.

 

Our next vehicle (that isn't a Super Duty) will definitely be electric.  It fits my wife's driving requirements perfectly, and they are a blast to drive.  Plus, my solar panels mean we get to drive it for free.

[akirby]

12 hours ago, blwnsmoke said:

 

Reservations are not sales.  And there are far more fuel powered vehicles being sold than EVs.

The statement was the general public doesn’t want EVs.  Someone with a reservation wants an EV even if they don’t buy it.

[rperez817]

13 hours ago, blwnsmoke said:

Reservations are not sales. 

 

Correct. Reservations indicate the number of "hand raisers" who are interested in purchasing a vehicle, of course not all will follow through with an actual purchase or lease.

 

With BEV, the biggest issue nowadays is the inability of automakers, including Ford, to get the products to customers in a timely manner. Motor Trend said this last year, and it still holds true today.

 

At this point, Americans aren't waiting for EV technology to mature or the price to come down. They're simply waiting for the EVs they want to be built.

[rperez817]

The projected losses Lawler mentioned for Ford Model e are a direct result of Ford still straddling the old and new worlds of the automotive industry. Totally different talent and totally different design, engineering, assembly, and marketing approaches are needed to be profitable with BEV. Fortunately, as Lawler also mentioned, Ford Model e is making progress in its efforts to "invest in capabilities, develop knowledge, build volume and gain share".

 

GrussGott described the situation perfectly posting in another thread last year. The last sentence in the post emphasizes just how critical new BEV optimized facilities like BlueOvalCity and Ion Park are for Ford.

 

On 2/13/2022 at 2:36 PM, GrussGott said:

You better tell the CEOs of Ford & VW your opinion because they disagree with you ...

 

Sure, an MFR can turn any building into anything ... for a PRICE ... and, sure, an MFR can make much of BEV on old infrastructure ... for a uncompetitive COST in time & labor ...

The business question is, can Ford COMPETITIVELY make a BEV on existing US infrastructure?   And that answer is no.  A modern BEV assembly must be vertically integrated and nothing Ford has in the US is.

 

So it turns out that to competitively make BEVs, a MFR needs totally different, i.e., vertically integrated, engineering and assembly.  So, yes, totally different.

 

Ford:

BlueOval City will become a vertically integrated ecosystem for Ford to assemble an expanded lineup of electric F-Series vehicles and will include a BlueOval SK battery plant, key suppliers and recycling

Farley: "“We are moving now to deliver breakthrough electric vehicles for the many rather than the few. It’s about creating good jobs that support American families, an ultra-efficient, carbon-neutral manufacturing system, and a growing business that delivers value for communities, dealers and shareholders.”  “BlueOval City’s assembly plant will harness ... cutting-edge technologies to deliver cost efficiencies"

 

VW:

Tesla is swiftly improving built quality and looks set to achieve a production time of just 10 hours per car at its Gruenheide plant, Diess said Thursday in a prepared speech at a staff meeting in Wolfsburg. VW's main electric-car factory in Zwickau needs more than 30 hours per vehicle, which should be reduced to 20 hours next year.

 

Further, it should be noted that the most productive auto plant in the World, i.e., makes the most vehicles of any type, is Tesla's Shanghai plant with > 850,000 vehicles in 2021 AND they're opening up a new line.  There's a reason Tesla is patenting their assembly & production process & equipment.

 

Any auto manufacturer that doesn't build new BEV plants with completely different - vertically integrated - engineering & assembly won't be able to compete in cost or production and will die.

 

Edited March 25, 2023 by rperez817

[Rick73]

2 hours ago, fordmantpw said:

And there are more Big Macs being sold than Five Guys burgers.  That doesn't mean that people don't want Five Guys burgers and it doesn't mean Big Macs are better.

I like your analogy; and would guess more Big Macs are sold not necessarily because they taste better, but because they are cheaper, and also because there’s a McDonalds on every corner.  ICE versus BEV is indeed similar.  ICE is presently cheaper and there are gas stations on every corner.  BEVs may be better in an absolute sense, but in my opinion ICE vehicles today offer greater value and convenience to more buyers, hence why over 10 times as many ICE are sold.