This is why some economists see a "carpocalypse" on the horizon.
https://edition.cnn.com/2024/04/24/business/ford-earnings-ev-losses/index.html
Ford’s electric vehicle unit reported that losses soared in the first quarter to $1.3 billion, or $132,000 for each of the 10,000 vehicles it sold in the first three months of the year, helping to drag down earnings for the company overall.
Ford, like most automakers, has announced plans to shift from traditional gas-powered vehicles to EVs in coming years. But it is the only traditional automaker to break out results of its retail EV sales. And the results it reported Wednesday show another sign of the profit pressures on the EV business at Ford and other automakers.
The EV unit, which Ford calls Model e, sold 10,000 vehicles in the quarter, down 20% from the number it sold a year earlier. And its revenue plunged 84% to about $100 million, which Ford attributed mostly to price cuts for EVs across the industry. That resulted in the $1.3 billion loss before interest and taxes (EBIT), and the massive per-vehicle loss in the Model e unit.
https://old.reddit.com/r/economy/comments/1ccv50d/fords_ev_unit_lost_13b_in_q1_or_132kvehicle/
by Tower6011
12 comments
[deleted]
As a Ford Lightning driver – the Ford EVs are amazing. Two things though..
Purchase price is gonna turn a lot off – hence all the incentives they’ve offered to get the existing inventory off the lot. That’s obviously driving some of the losses.
Range – they say 320mi. I can get that in city or better, but on the highway 250-280mi. I don’t even mind that, but the charging network needs to get a lot better so I can drive, not worry about where the next charger is, pop in to the charger when needed, spend 20m getting my battery back up and go.
Right now I’m having to plot my course in 200mi increments – most people don’t want to deal with that shit, and it’s totally understandable.
Who could have possibly predicted this????
But seriously, we all just want the old small ford ranger back. Something with utility, affordability and reliability . Those trucks were a lot of fun
This is simply Ford preparing it’s lobbying case for the federal government to help subsidize and kickstart infrastructure development and investment.
Once again, federal government will be forced to subsidize a corporation with public money—and in this case, it will hold the entire planet hostage until it gets what it wants.
Why not make an affordable sedan? Revolutionary mindset right? Actually that is EXACTLY was Henry Ford set out to do with the model T over a hundred years ago!
Yabbut. Subsidies. climate change.
Production will be in Mexico. You get AI.
They don’t actually lose X$ amount per vehicle sold just so you know.
It takes money to buy new equipment, build new factories, adjust to the new production process. They will turn a profit eventually. It’ll take longer for some than others and it depends heavily on economies of scale.
Tesla was also hemorrhaging money until they weren’t. Now, they’re the most profitable manufacturer on a per-car basis.
I believe Ford lost track of who their clients are.
skip some of the relevant parts why don’tcha
“The losses go far beyond the cost of building and selling those 10,000 cars, according to Ford. Instead the losses include hundreds of millions being spent on research and development of the next generation of EVs for Ford. Those investments are years away from paying off.
The company said it is its “intention” to be have EV pricing cover the actual costs of building each EV, rather than covering all the research and development costs, within the next 12 months. But a price war among EVs for about a year and a half has made even that measure of profitability very difficult said Ford CFO John Lawler. He said while Ford has removed about $5,000 in cost on each Mustang Mach-E, “revenue is dropping faster than we can take out the cost.””
It’s an accounting trick. They’re taking expenses only tangentially related to their EV manufacturing and lumping it in for a tax benefit.
Yes, they do have some expenses because they’re ramping up EV production, but it’s nowhere’s near these levels.
If we had a proper ****ing media with actual journalists anymore we wouldn’t be seeing stories like this crap. It’s just nasty little click bait.
I really don’t understand how automakers are so blind to the cold hard reality that people cannot reasonably afford most of the vehicles they’re making.
“I want an electric truck. I was promised that it would cost $40,000 with a range of 300 miles and I already paid you guys $100 for a reservation 3 years ago for it.”
“I got you, bro. Do you mind paying $1,500 a month for it because now it costs more than double?”
“I do.”
“I don’t got you, bro.”
“Don’t you have any simple EV trucks?”
“I SAID I DON’T GOT YOU – GO AWAY POOR – YOU’RE SCARING AWAY ALL THE MILLIONAIRE TRUCK BUYERS!!!!”
That’s basically the experience we’ve had thus far.
American automakers simply refuse to address the root of the issue – the masses cannot afford to drive high-end EVs or even high-end ICE.
Yes ZIRP happened, stimulus happened and it was easy to focus on high end cars to make fat greasy profits. But that era is gone. Yet the automakers refuse to acknowledge that reality.
The reality is the masses need a basic economy car that they can afford. If American automakers refuse to make them, China will. They already have a $10K EV. Say what you want about it but if it gets people from point A to point B, the masses only have so much money to spend on their car.
This isnt the first time this happened. The “foreign automakers taking our jerbs, subsidize us” hysteria already happened first with Honda and Toyota, then with KIA and Hyndai now it is poised to happen with BYD.
And before anyone says “hurr americans dont want to drive small cars” correct, but in reality their wallet forces them to drive economy. Look at the car inventory levels, they tell you exactly what Americans want to drive regardless of what people say.