Ford has high hopes for its electric cars, but sales are not keeping up. Those in Michigan lose a lot of money and the situation is no longer sustainable so there will be many cuts. Battery-powered cars are the future in the short and medium term, but as the saying goes, there is a way from saying to doing. All brands are committed to strong electrification of their ranges. Ford needed this trend to accelerate and before continuing to lose money it will make cuts and postpone large investments in its electric vehicle department.
Those from Michigan have always wanted to become one of the main players in electric mobility. Their great ambition is to surpass Tesla on their ground and to achieve this, over the years, they have announced large sums of money to boost their electric fleet, known as the Model E division. Despite these big plans, Ford does not offer a large and varied electric offering. The Mustang Mach-E is the one that pulls the car the most in this new stage, while the Ford F-150 Lightning is picking up cruising speed. Despite this, the problems are more than evident as reflected in the figures.
Estimated loss for 2023 is 4.5 billion dollars
As part of its third-quarter earnings report, Ford announced that the electrical division has suffered losses totaling $1.3 billion in the July-September cycle alone. If we look back we see how this figure is approximately double that obtained in the same cycle of the previous year, despite having registered a 26% increase in income. If we take into account the cars that Americans have sold in this quarterly cycle, the result shows that for each unit sold, on average, Ford loses $36,000.
That leads us to a situation that is impossible for any brand to maintain. Given the delicate financial situation of the electric vehicle department, Ford has decided to delay its plans and cut investments. Up to 12 billion dollars will remain in limbo, as indicated by American sources. Investments will slow down or even stop waiting for the market situation to change. The first steps will be to cut production of the Mustang Mach-e, its best-selling electric vehicle, as well as delay the construction of a large battery plant. For this entire year, Ford expects to lose $4.5 billion with its electric vehicles.
The brand’s dealers have been the first to sound the alarm. Electric cars are not selling at the rate necessary to justify the expense. During these years, Jim Farley, CEO of Ford, has ensured the viability of his project by confirming price parity between electric and combustion cars in 2030. Given the current instability, no one knows how the market will respond in the coming years. Many manufacturers lose money and the situation is increasingly delicate. Mercedes doesn’t have sales results either. The latest balance sheets show losses and no one knows how long the brands will be able to last. Meanwhile, Tesla and China continue to dominate an industry that could change a lot in the coming years.