In the first quarter, Ford’s electric vehicle segment, Model e, experienced a loss of $1.3 billion USD, equivalent to $132,000 USD per car sold. This was a 20% decrease from the same period last year and resulted in revenue declining by 84% to $100 million USD. The main reason for these losses was the ongoing price war in the electric vehicle industry.
John Lawler, Ford’s Chief Financial Officer, attributed the challenges in achieving profits in the electric vehicle segment to this price war that has been ongoing for nearly 2 years. Despite reducing costs by $5,000 per Mustang Mach-E, sales continued to decline.
CEO Jim Farley mentioned that Ford is making changes in the electric vehicle segment to ensure profitability in the next generation of cars. The company is transitioning from gasoline cars to electric vehicles and aims to become a leader in this rapidly evolving market.
Ford Pro, a segment focused on high-volume sales to business and government customers, has shown significant demand for electric vehicles. However, it mainly sells gasoline cars. The Ford Pro segment recorded a pre-tax profit increase in the last quarter while Ford Blue segment which sells gasoline cars to consumers experienced a decrease in revenue.
Ford’s competitors in the electric vehicle sector have reported different business results. General Motors expects its North American electric vehicle segment to be profitable in the second half of the year while Stellantis has been profitable since last year. Tesla reported a decrease in first-quarter profits and revenue.
Despite these challenges Ford remains optimistic about the future of electric vehicles and is working towards building a sustainable and profitable business model. The competition is fierce but with dedication and hard work Ford can succeed
