Essay by Eric Worrall
First published JoNova; Ford CEO Jim Farley still plans to push forward with his loss making electric vehicle strategy.
Ford just reported a massive loss on every electric vehicle it sold
By Chris Isidore, CNN
Updated 2:10 PM EDT, Thu April 25, 2024New YorkCNN —
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.
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.
And that means this is not the end of the losses in the unit – Ford said it expects Model e will have EBIT losses of $5 billion for the full year.
…
Despite the EV losses, Ford CEO Jim Farley said in a call with investors the company is making changes in its EV business, and that the company’s planned next generation of EVs will allow it to be profitable on that business in the near future.
…
Read more: https://edition.cnn.com/2024/04/24/business/ford-earnings-ev-losses/index.html
What can I say? If you find yourself in a hole, you should stop digging.
Not many people know that Henry Ford and Thomas Edison were good friends, and together tried to develop an electric automobile.
Henry Ford and the electric car
Daniel Strohl
05/25/2010photo from the collections of The Henry Ford
That Henry Ford and Thomas Edison became good friends later in their lives is well known. …
That Edison and Ford later put their minds together to conceive a low-priced electric car is not so well known.
…
… In early 1914, word had gotten around that work had started on a low-priced electric car. … Ford himself even confirmed the rumors in the January 11, 1914, issue of the New York Times:
Within a year, I hope, we shall begin the manufacture of an electric automobile. I don’t like to talk about things which are a year ahead, but I am willing to tell you something of my plans.The fact is that Mr. Edison and I have been working for some years on an electric automobile which would be cheap and practicable. Cars have been built for experimental purposes, and we are satisfied now that the way is clear to success. The problem so far has been to build a storage battery of light weight which would operate for long distances without recharging. Mr. Edison has been experimenting with such a battery for some time.
… we know for a fact that at least one experimental Ford electric was built in 1913, …
…
… the downfall of the Edison-Ford electric car came about because Ford demanded the use of Edison’s nickel-iron batteries in the car, and would have no other battery powering this car. Edison’s batteries, however, were found to have very high internal resistance and were thus incapable of powering an electric car under many circumstances. Heavier lead-acid batteries (which would have made the car too ponderous) were substituted behind Henry Ford’s back, and when he found out, he went ballistic. The program quickly fell to the wayside with other projects demanding Henry Ford’s time. According to The Ford Century, Ford invested $1.5 million in the electric car project and nearly bought 100,000 batteries from Edison before the project fell apart.
…
Read more: https://www.hemmings.com/stories/2010/05/25/henry-ford-and-the-electric-car
Perhaps Ford CEO Jim Farley imagines himself as Ford’s successor, paying homage to the great man who founded his company by trying to make Ford’s original dream of a commercially successful electric vehicle a reality.
If this is the case, Farley should also maybe consider the other lesson Ford’s EV experience provided, that after burning $1.5 million on the project (in 1914!), Henry Ford finally woke up and realised it was time to pull the plug.
Related
