In the first quarter of 2021, Ford’s electric vehicle segment faced a significant loss of $1.3 billion, equating to $132,000 per car sold. Despite selling only 10,000 electric vehicles in the same period, down 20% from the previous year, Ford attributed this loss to an industry-wide price war that led to a decrease in revenue from this segment by 84% to $100 million.
Ford’s Chief Financial Officer John Lawler highlighted the ongoing price war among electric vehicle manufacturers as one of the factors contributing to their losses. He stated that despite reducing costs by $5,000 per Mustang Mach-E, sales continued to decline rapidly. However, Ford CEO Jim Farley remained optimistic about achieving profitability with the next generation of cars in this segment.
Unlike other traditional car manufacturers that are transitioning from gasoline cars to electric cars in the upcoming years, Ford is unique in that it discloses results specifically for its electric vehicle segment. Last year, Model e faced a loss of $4.7 billion and sold over 116,000 units. However, not all electric vehicles sold by Ford fall under this segment. Instead, Ford Pro handles high-volume sales to business and government customers and has shown substantial demand for electric vehicles like E-Transit and F-150 Lightning. This segment experienced more than double pre-tax profit in the last quarter with an increase in revenue and units sold.
In contrast to Model e’s losses and declining sales in the first quarter of 2021, Ford Blue reported a decline in revenue and units sold but made a profit of $905 million USD compared to its previous year results. Meanwhile competitors like General Motors and Stellantis have reported positive business results in their respective electric vehicle segments. Despite these varying successes across the industry, Tesla reported a decrease in profits and revenue during this period.
In conclusion, while Ford’s Model e faces significant challenges due to industry competition and price wars among manufacturers selling electric vehicles (EVs), other segments such as Ford Pro have shown promising growth opportunities for EV sales to businesses and government customers. With further innovation and investment into EV technology and infrastructure development across all sectors within the automotive industry could lead towards more sustainable transportation options for consumers around the world.