Electric cars are "burning money" for Ford, while making gasoline cars is still "making money". But is that the whole picture?
Ford has just announced its first quarter 2023 revenue. Accordingly, the electric vehicle division is spending a lot of the company's money, but the production and sales of internal combustion engine vehicles are still enough to offset losses on electric vehicles, helping the company The company is still profitable.
Ford lost heavily when making electric cars - 1
Ford is losing nearly 60,000 USD on each electric car sold (Illustration: Automotive News).
For the first time in history, Ford has detailed the sales of the new divisions established more than a year ago, which are Ford Model e, Ford Blue and Ford Pro. As the name suggests, Ford Model e is in charge of electric and digitally connected vehicles, while Ford Blue handles the production of internal combustion engine vehicles. The third division - Ford Pro - focuses on commercial vans and trucks.
Ford lost heavily when making electric cars
The notable number in the revenue report is that Ford is losing an average of $58,333 per electric vehicle sold in the first three months of 2023. Ford only sold 12,000 electric vehicles in the first quarter of this year, and the vehicle division Electricity lost 700 million USD. Electric cars only brought in sales of 700 million USD, compared to 1.6 billion USD in the previous quarter.
The loss of nearly 60,000 USD on each electric car sold is a terrible number. However, there are many factors to consider. First, production fell due to the planned closure of the Cuautitlan plant in Mexico, which produces the Mustang Mach-E model. The temporary production stoppage is to increase this factory's output to 210,000 vehicles/year by the end of this year.
Similarly, Ford's electric vehicle division is spending a lot of money as it is in the process of restructuring its manufacturing operations, including investing $3.5 billion to build the company's LFP battery factory in Marshall, Florida. Michigan (USA), and the BlueOval City factory in Tennessee, which will produce Ford's new generation electric SUV model in 2025, with a capacity of 500,000 vehicles/year.
Gasoline cars and commercial vehicles still "make money"
Different from the electric vehicle division, Ford Blue recorded net revenue before taxes and interest of up to 2.6 billion USD in the first quarter, achieving a profit margin of 10.4%. Bringing in the most money for Ford is the F-150 pickup truck, which is also the leading model in the US pickup market.
Although new product costs and inflationary pressures affected profits, Ford Blue and Ford Pro helped the US automaker achieve a net profit margin of 4.2%, the highest level in more than a year. come here.
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