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The next few years will be rough for Ford’s electric vehicle (EV) unit as the automaker doesn’t expect to make any profit until 2026. This was the prediction made by Ford CFO John Lawlor during a phone conference call with reporters.
Automaker Projects Losses This Year
Lawlor said, during the call, that the carmaker’s EV division – Ford Model e – that the automaker will lose $3 billion this year as it works toward its expected profitability target in 2026. The CFO told the reporters that Ford’s EV business should be considered a startup, implying that startups lose money during their first few years.
The key difference between a real startup and Lawlor’s outline is that profits will offset losses incurred by Ford Model e in Ford Blue, the automaker’s standard vehicle division (internal combustion engine vehicles – ICE – and hybrids division), and Ford Pro (commercial and services division). Lawlor noted on the conference call that startups always lose money. And with Model e acting like a startup within Ford, the automaker expected losses. “As everyone knows, EV startups lose money while they invest in capability, develop knowledge, build volume, and gain share,” Lawlor noted.
According to a story on Yahoo!News detailing Ford’s financial planning Ford Blue is expected to turn a profit this year of $6.8 billion, and Ford Pro is expected to see restated profits of $3.2 billion for 2023. Those goals are based on the expected production figures for 2023 and 2026. According to Lawlor, Ford’s EV production is expected to hit 600,000 units by the end of this year and two million units by the end of 2026.
The call previewed a major restructuring that Ford is implementing. A more detailed announcement for investors was to be detailed this week. “It’s a first look at the strategic implementation of a restricting plan announced last year by Ford CEO Jim Farley. Ford began the restructuring process last year.
Ford F-150 Lightning Will Have Unique Features
Ford Tops SUV Segment, 2nd in EV SUVs
According to a story on the BusinessInsider.com, Ford SUV sales “so far in 2023 made it America’s top-selling brand with the Explorer earning the title as America’s best-selling three-row midsize SUV. Mustang Mach-E, the automaker’s EV SUV, was the second best-selling electric SUV in 2022.”
Meanwhile, says Senior Reporter John Goreham, Ford's F-150 has solved some interesting problems..
And, Senior Report Denis Flierl noted that used vehicles especially Subarus have seen prices dip.
Ford Motor Photo
Marc Stern has been an automotive writer since 1971 when an otherwise normal news editor said, "You're our new car editor," and dumped about 27 pounds of auto stuff on my desk. I was in heaven as I have been a gearhead from my early days. As a teen, I spent many misspent hours hanging out at gas stations (a big thing in my youth) and working on cars. From there on, it was a straight line to my first column for the paper "You Auto Know," an enterprise I handled faithfully for 32 years. Not many people know that I also handled computer documentation for most of my earnings while writing YAN. My best writing, though, was always in cars. My work has appeared in Popular Mechanics, Mechanix Illustrated, AutoWeek, SuperStock, Trailer Life, Old Cars Weekly, Special Interest Autos, etc. You can follow me on: Twitter or Facebook.
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