Dive Brief:
- Ford Motor Co. estimates its Model e electric vehicle business will lose $4.5 billion this year, a 50% jump from previous projections, the company said Thursday.
- But the automaker expects its other business units, Pro and Blue, to offset its EV losses in 2023, with revenue increasing 12% year-over-year to $45 billion.
- Ford estimates EV production will reach 600,000 vehicles a year in 2024. It originally expected to eclipse that figure this year.
Dive Insight:
For the first half of the year, Ford's Model e unit saw its operating margin shrink 70.9%, while Ford Blue, the company's gas and hybrid division, increased its operating margin 9.8%. Ford lost $32,000 for each EV sold in Q2 amid price wars and the high costs of raw materials for batteries that erased its margins.
During an earnings call Thursday, Ford CFO Chris Lawler said that Ford is still targeting an 8% operating margin in 2026 and has no plans to reduce capital spending on EVs.
As Ford slows its EV ramp-up, it’s focused on building more profitable hybrid vehicles. Ford plans to quadruple sales of its hybrid models in the next five years. Currently, 10% of all F-150 and 56% of all Maverick pickups sold in the U.S. are hybrid versions.
“We've proven we can design and develop popular vehicles that stand out from the competition irregardless of their propulsion, and we made sure Ford is profitable as we move through this ICE to EV transition,” Ford CEO Jim Farley said.
