The company expects profits to come from electric cars in its commercial business, while losses from electric cars continue to grow.
Ford expects to lose about $3 billion from the company’s electric vehicles this year. Losses are expected to increase due to capital expenditures at factories in Tennessee and Kentucky, as well as the addition of additional battery chemistry.
Ford released the dire forecast during a Thursday morning call with reporters. Ford expects sales of the EV unit, called the Model e, to grow from $2.1 billion last year to nearly $3 billion in 2023. It is expected that -lost even as much as the sale of the Mustang Mach-E electric crossover and the F-150 Lightning are complete. Electric pickup trucks are growing,
and the company is investing more in improving production. The announcement came on a Thursday morning call with reporters where Ford outlined a new financial reporting system. The company announced a new series of models divided into Ford Blue (petrol / hybrid car), Ford Model e (small electric car) and Ford Pro (utility car).
“We have really ‘reconstructed’ Ford, and the business side that provides new degrees of strategic clarity, transparency and accountability in Ford + plan for growth and profit,” said the chief financial officer. John Lawler. “It’s not just about changing the way we report financial results; we’re changing the way we think, make business decisions, allocate capital for returns. The highest.”
The EV division’s losses will be covered by the expected increase in profits from Ford’s other two divisions, Lawler predicts $7 billion in earnings before interest and taxes this year for Ford Blue and the like $6 billion for Ford Pro.
While speaking to the press, Lawler explained the reason for the expected setback for the Model e arm of the business.
“Ford Model e is the first EV within Ford,” he said. “As everyone knows, EV startups lose money when they invest in capacity, build knowledge, raise volume, and gain share.”
These rising losses will come as Ford continues to invest in increasing production of electric vehicles. The company plans to build two new battery plants in Kentucky and a third in Tennessee, as well as a $3.5 billion lithium-iron-phosphate battery plant that it will build in Marshall, Michigan.
