“Ford plans to quadruple sales of gas-electric hybrids in the next five years, as it struggles to reduce the cost of its money-losing first-generation battery electric vehicles”
"Ford lost more than $32,000 on average on EVs delivered by Model e during the second quarter.
Chief Financial Officer John Lawler said it was not fair to focus on the loss per vehicle, given the company’s upfront investment to launch the first-generation EVs."
Or maybe much more.
Ford reported a $1.08 billion operating loss on its EV business during the second quarter. During that span, Ford sold 14,843 EVs. That means Ford lost about $72,762 for each EV it sold…
In March, the company warned that it will lose some $3 billion on its EV business this year. But on Thursday, Ford upped the ante, saying its EV-related losses this year will be a whopping $4.5 billion…
In the second quarter of last year, the company sold 15,527 EVs. Ford sold just 14,843 EVs during the second quarter of this year.
DB2
Well, that was then and this is now…
Ford just reported a massive loss on every electric vehicle it sold
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.
DB2
I suspect this mostly a tax dodge. Start up costs for new models are being expensed immediately to reduce income taxes. More normally they would be ammortized over x years.
That does clear the decks so future sales will be more profitable and incremental costs will be lower. Unless of course more investment is required.
At the same time, total company depreciation and amortization hasn’t changed much in the last three years and is down from five years ago.
2023 $6.5 billion 2022 $6.5 2021 $6.0 2020 $7.5 2019 $8.5 2018 $8.4 2017 $8.6 2016 $8.7 2015 $8.0
DB2
OK, and they are making large investments in EVs. How can that be? By exspensing the investment.
True. I was surprised that it hadn’t changed much in the last few years and has actually gone down.
DB2