Ford announces losing more than $36,000 on each copy of its electric cars. This is much more than the manufacturer’s forecasts, while sales are down. The latter now plans to reduce investments in electric cars. Opposite, Tesla would shine almost brightly with profits that are the envy of the competition.
Like all manufacturers, Ford will have to accelerate its electrification over the coming years, in order to meet the requirements of the European Union. Fortunately, it already has several models, namely the Mustang Mach-E, the F-150 Lightning as well as the new Explorer, while it is working on other launches, including an electric Puma for 2025.
Heavy losses
But the American firm will still have to accelerate the pace, since it plans to go 100% electric in Europe from 2030, as it announced in a press release in 2021. This is particularly why it is working on the development of an affordable model, at less than 25,000 euros to compete with the Citroën ë-C3 and the Volkswagen ID. 2. But isn’t this likely to hurt the brand and force it to cut into its margins?
This is indeed what is likely to happen, even if the latter does not want to reduce its profits. And for good reason, the manufacturer has just revealed the results for the 3rd quarter, and they are not very good. Although it was expected to record losses with its electrical division, to the tune of around $3 million, these losses are in fact more worrying.
As the site explains Automotive Newsthe firm with the blue oval would in fact lose no less than $36,000 on every electric car sold. However, the Mustang Mach-E is on sale here from 52,990 euros. Suffice to say that this is quite a loss, especially in comparison with its rivals. According to our calculations, number 2 in electric, on the verge of becoming first, BYD would earn no less than $1,727 per car (electric and hybrid combined) in the third quarter of 2023.
For its part, Tesla would earn $4,259 over the same period, despite successive price reductions and very affordable prices. Suffice to say that the situation is worrying for Ford, which does not hesitate to admit that its Model e division dedicated to electric vehicles is not in the best shape. Between June and September, the manufacturer recorded no less than $1.3 billion in losses.
Disappointing sales
However, sales of electric cars have increased at Ford, with a Mustang Mach-E which caused its registrations to soar by 42.5% compared to last year. But this success, the manufacturer undoubtedly owes to the price reductions which have been put in place in order to better compete with the Tesla Model Y. Except that this necessarily has repercussions on the margins generated, therefore revised downwards.
But the brand’s strategy still works, since the electric SUV remains Ford’s best-selling zero-emission (exhaust) car. And this despite a sharp drop in the month of October, forcing the manufacturer to reduce its production rate, as explained by journalists fromClean Automotive. But then, what is the solution envisaged by the Blue Oval to stop the bleeding?
Well the latter makes a radical decision. In fact, he announces that he will simply “ reduce investments in electric vehicles“. A measure that seems to go against the current trend. Ford plans in particular to delay the construction of a new battery factory in Kentucky, while the 2nd initially planned is still current.
On the other hand, no question of canceling the launch of the next models, while Ford plans to market a large seven-seater vehicle as well as a pick-up. For the moment, Ford has not specified how long these investments will be postponed. His boss Jim Farley emphasizes for his part that demand is not yet strong enough to justify the latter at the moment, but that this could end up changing.
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