Ford Says Electric Vehicle Profits Won’t Come Until 2025
Ford reported a full year of net losses in 2022 with a particularly rough fourth quarter, citing “execution issues,” according to CNBC.
Last year, Ford lost $2 billion, representing an almost-$20 billion drop from its 2021 profit. The company fell short of full-year financial forecasts by $1.1 billion, with a Q4 net income of $1.3 billion — $11 billion less than in 2021.
The company also fell short of delivery estimates by 100,000 EVs, marking roughly $1 billion in earnings according to Ford CEO Jim Farley.
“We should have done much better last year,” Farley said. “We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.”
Ford Plans to Reduce Reliance on Volkswagen for Next-Gen Electric Vehicles https://t.co/adzQMfQggZ
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Farley expects the company to reach higher margins on EVs with its next-generation vehicles, which the company is expected to start production on in 2025 at its currently under-construction Tennessee plant. Until then, the Ford EV business remains unprofitable.
The American automaker also saw a $7.4 billion loss on its 9.5% stake in EV startup Rivian, plus another $2.8 billion loss on its investment in disbanded Argo AI self-driving car unit.
Ford is preparing for another round of layoffs, though the news also comes just days after the automaker was one of the few to follow Tesla’s move to cut prices by dropping its Mustang Mach-E price tag.
“Our cost structure is not competitive,” Farley added. “Our quality is not where it needs to be. And we will take the actions and be more aggressive about making sure that we’re making progress on both of those key areas for us in 2023.”