DETROIT (AP) – Ford Motor Co’s electric vehicle business has lost USD3 billion before taxes during the past two years and will lose a similar amount this year as the company invests heavily in the new technology.
The figures were released yesterday as Ford rolled out a new way of reporting financial results. The new business structure separates electric vehicles (EVs), the profitable internal combustion and commercial vehicle operations into three operating units.
Company officials said the electric vehicle unit, called ‘Ford Model e’, will be profitable before taxes by late 2026 with an eight per cent pretax profit margin. But they wouldn’t say exactly when it’s expected to start making money.
Chief Financial Officer John Lawler said Model e should be viewed as a start-up company within Ford.
“As everyone knows, EV startups lose money while they invest in capability, develop knowledge, build (sales) volume and gain (market) share,” he said.
Model e, he said, is working on second- and even third-generation EVs.
It currently offers three EVs for sale in the United States (US): the Mustang Mach E SUV, the F-150 Lightning pickup and an electric Transit commercial van.
The new corporate reporting system, Lawler said, is designed to give investors more transparency than the old system of reporting results by geographic regions. The automaker calculated earnings for each of the three units during the past two calendar years.
Model e had pre-tax losses of USD900 million in 2021 and USD2.1 billion last year, and it is expected to lose USD3 billion this year.
In the past two years Ford has announced it would build four new battery factories and a new vehicle assembly plant as well as spending heavily to acquire raw materials to build EVs.
By the end of this year, the company based in Dearborn, Michigan in the United States expects to be building EVs at a rate of 600,000 per year, reaching a rate of two million per year by the end of 2026.
