Ford’s electric vehicle (EV) business recorded a significant loss of $1.1 billion in the second quarter of 2024. Despite generating $1.1 billion in revenue, the EV unit faced a loss margin of -99.5%. This downturn was compounded by a 23% decrease in vehicle volume compared to the previous year.
Key factors contributing to the losses included market conditions, material costs, battery economics, and engineering expenses, according to Ford.
Industry-wide pricing pressure also played a significant role in the financial performance of Ford’s EV sector. “Ford Model e had an EBIT loss of $1.1 billion amid ongoing industrywide pricing pressure on first-generation electric vehicles and lower wholesales,” Ford stated.
While the EV business struggled, Ford reported a total second-quarter revenue of $47.8 billion, a 6% increase from the previous year, driven by a slight rise in wholesales. The company credited the uptick to its refreshed vehicle lineup, including the all-new F-150 pickup and record volumes of Transit commercial vans.
Ford’s overall net income for the quarter was $1.8 billion, with adjusted earnings before interest and taxes (EBIT) reaching $2.8 billion. Profits were largely bolstered by commercial vehicles and the Ford Blue internal combustion engine (ICE) business. However, an increase in warranty reserves impacted profitability. Efforts to enhance the quality of new products have started yielding positive results, improving customer satisfaction and operating performance.
It’s clear producing electric vehicles and making a profit is very difficult. Tesla seems to be the only one able to manufacture EVs at scale and turn major profits, compared to legacy automakers.
