Ford: More hybrids and fewer money losing EVs

“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.


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Well, that was then and this is now…

Ford just reported a massive loss on every electric vehicle it sold
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.


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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.

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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


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.