PATH TO BANKRUPTCY? Ford Losing $132,000 on Every Electric Vehicle Sold This Year
Ford is losing a staggering amount on every electric vehicle (EV) it sold in the first quarter of 2024, underlining the financially unsustainable nature of the industry.
The company reported a loss of $1.3 billion in its electric vehicle division in the first quarter results, equivalent to $132,000 for each of the 10,000 EVs it sold in the past three months.
CNN reports:
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.
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.
Ford, meanwhile, is far from the only EV manufacuter feeling the pain at the moment. Even the most popular brands such as Elon Musk’s Tesla have seen a marked decline in sales, forcing the company to lay off 10 percent of its global workforce.