Go Woke, Go Broke: Ford Announces Mind-Bogglingly Huge Losses on Each EV Sold in 2024

Written by Anthony Altomari on June 2, 2024. Posted in Current News

Ford’s attempt to electrify its revenue through electric vehicle production has been a swing and a miss.

In response to the decreasing market for EVs, Ford has begun cutting orders from its battery supplies, according to Bloomberg.

Even though this changeup will be beneficial in the long run, Ford will not come out of its EV experiment unscathed. Sources told Bloomberg that Ford lost over $100,000 per EV in the first quarter of 2024, more than double its deficit from last.

The news comes as the EV market across the country has taken a hit in 2024. The Associated Press reported last month that sales of electric vehicles only grew at 3.3 percent during the first quarter of this year, a sharp decrease from the 47 percent growth seen last year.

The EV share of total U.S. sales also fell year over year from 7.6 percent to 7.15 percent in the first quarter. The declining sales numbers support some automakers’ belief that they moved too aggressively in expanding their EV production, the AP reported.

Given the state of the EV market, Ford is trying to reinvent its EV strategy. The American automaker has decided to reduce its spending on battery-powered models by $12 billion, Bloomberg reported.

Ford’s already forecast it will lose up to $5.5 billion from EVs alone this year.

Bloomberg reported that Ford CEO Jim Farley recently said Ford’s EV division, known as Model e, “is the main drag on the whole company right now.”

The company has taken several measures to try and remain competitive with the EV market king, Tesla.

“We’ve seen prices coming down quite dramatically and that’s why we haven’t been able to keep up from a cost reduction standpoint,” Ford’s CFO John Lawler told analysts April 24 on the company’s earnings call, according to Bloomberg.

“But we’re targeting to take out as much cost this year as we can on Model e and all in the spirit of driving toward that contribution margin positive.”

Ford’s shifted its focus toward producing smaller, more affordable EVs. The company is fast-tracking the release new EV models it expects to debut in 2026. The models will reportedly start at $25,000.

Farley said he expects that these new EVs will be able to turn a profit in their first year, according to Bloomberg. If all goes to plan, the price-cutting move could serve to make Ford one of the biggest players in the EV market.

Despite the optimism for the future, Ford’s present serves as a cautionary tale of  the pitfalls of trying to jump the market.

When Ford announced two years ago that it was splitting its business into two divisions, with the Model e division focusing on EVs and the Ford Blue division focusing on traditional internal combustion vehicles, the company envisioned that it was on the verge of something great.

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