Ford Model E Outperforms Its Loss Projections!

[Mirak]

https://www.foxbusiness.com/technol...ctric-vehicles-year-despite-increased-revenue

Ford Motor Company announced it is projected to lose a whopping $4.5 billion from electric vehicles (EVs) this year, up from the previous projected loss of $3 billion.

The company released its second-quarter financial results on Thursday. The U.S.-based automaker's EV division, called "Ford Model e," has lost $1.8 billion so far this year, according to Fortune.

The projected $4.5 billion loss is over twice as much as Model e's $2.1 billion loss in 2022.

To be fair, I don’t know that these loss projections take into account the plan to charge $800 annual subscriptions for BlueCruise.

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[BigMach-E]

Well, this probably counts building out Blue Oval city, which is a sunk cost that doesn’t recur, and a bunch of other projects that are a one-time cost.

 

[Guss-E 2021]

It's still mostly high COGS without economies of scale to offset. But Ford is scaling up. Blue Oval City will help for sure. Globally (as in all divisions), Ford is doing fine. I'm sure Maverick and Bronco (to name a few) can carry the company into 2026 when it expects Model E to be EBIT positive. The whole NACS thing should help sales volume as well.

 

[bdonpwn]

Takes a few cash bonfires to get into the EV game.

 

[DevSecOps]

Maybe this has been posted elsewhere but I'm surprised that I haven't seen it come up.

Ford announced that they are cutting investments in EVs and relocating that money to ICE and hybrid:

https://greentechlead.com/electric-...tment-in-money-losing-electric-vehicles-43435

https://www.cnbc.com/2023/07/28/ford-embraces-hybrids-as-it-loses-billions-on-evs.html

https://www.reuters.com/business/au...rofit-view-supply-chain-woes-ease-2023-07-27/

 

[JoeDimwit]

Between Blue Oval City in Tennessee, the new battery plants in Kentucky, major investments In both Quatalan and the Rouge Electric Vehicle center, and the 6 weeks REVC was shut down for battery issues earlier this year, those numbers are hardly surprising.

 

[Vulnox]

Maybe this has been posted elsewhere but I'm surprised that I haven't seen it come up.

Ford announced that they are cutting investments in EVs and relocating that money to ICE and hybrid:

https://greentechlead.com/electric-...tment-in-money-losing-electric-vehicles-43435

https://www.cnbc.com/2023/07/28/ford-embraces-hybrids-as-it-loses-billions-on-evs.html

https://www.reuters.com/business/au...rofit-view-supply-chain-woes-ease-2023-07-27/

I don't see any clear numbers in the articles that they are "cutting investments", just shifting short term focus to hybrids. Only the reuters article discusses shifting investment and it's one line, the cnbc doesn't say it at all.

So I don't think it's a sign they are giving in on EVs in general, just not going further in on the ramp up of the first gen EVs (MachE, Lightning) that have been costly to produce and retool for. I would only be worried if they indicated a delay for second gen replacements, which I don't see in any article, meaning their investment is unchanged as far as EV future. I think it makes sense for them to not push harder to increase MachE production, which is where they were focusing, unless they can get price and profit down to compete with Tesla, which doesn't seem possible for this gen. Ford needs something more exciting, like a US/Canada BEV Explorer. The two row EV market is so saturated. They also need it to do something that stands out, if they launch it with 150kW peak charging or something stupid their pain is only going to continue.

As one of the executives say in your articles, the issue isn't interest, it's price, and if Ford can't get the price down while keeping them profitable then it does have a problem for sure.

 

[DevSecOps]

I don't see any clear numbers in the articles that they are "cutting investments", just shifting short term focus to hybrids. Only the reuters article discusses shifting investment and it's one line, the cnbc doesn't say it at all.

So I don't think it's a sign they are giving in on EVs in general, just not going further in on the ramp up of the first gen EVs (MachE, Lightning) that have been costly to produce and retool for. I would only be worried if they indicated a delay for second gen replacements, which I don't see in any article, meaning their investment is unchanged as far as EV future. I think it makes sense for them to not push harder to increase MachE production, which is where they were focusing, unless they can get price and profit down to compete with Tesla, which doesn't seem possible for this gen. Ford needs something more exciting, like a US/Canada BEV Explorer. The two row EV market is so saturated. They also need it to do something that stands out, if they launch it with 150kW peak charging or something stupid their pain is only going to continue.

As one of the executives say in your articles, the issue isn't interest, it's price, and if Ford can't get the price down while keeping them profitable then it does have a problem for sure.

I'm just quoting the articles. I don't think specific numbers were addressed with Farley so therefore we wouldn't know those.

The key take away that I saw was Farley saying that they plan on doubling down on their ICE and hybrid lines as they are "shifting investment to Ford's commercial vehicle unit and citing plans to quadruple sales of gas electric hybrids over the next five years."

Shifting, cutting, whatever you wanna call it, they still see the future in ICE. It doesn't matter to me I'm not anti ICE or pro EV, I'm just passing on the articles.

I do however find it very strange at the boom of new gas stations going in, in California. I see new ones going up all the time. Within 15 miles of me there's 5 new gas stations being built.

 

[VegasWeezy]

I'm just quoting the articles. I don't think specific numbers were addressed with Farley so therefore we wouldn't know those.

The key take away that I saw was Farley saying that they plan on doubling down on their ICE and hybrid lines as they are "shifting investment to Ford's commercial vehicle unit and citing plans to quadruple sales of gas electric hybrids over the next five years."

Shifting, cutting, whatever you wanna call it, they still see the future in ICE. It doesn't matter to me I'm not anti ICE or pro EV, I'm just passing on the articles.

I do however find it very strange at the boom of new gas stations going in, in California. I see new ones going up all the time. Within 15 miles of me there's 5 new gas stations being built.

The articles explicitly state that Ford is committed to its EV plans. The fact that they are shifting some resources doesn't mean they are cutting the EV plans. It makes sense for them to pour resources into the commercial unit and into the hybrid vehicles that are currently selling well and turning a large profit. They will be able to use those strong gains to help offset the losses (and then some) while EV adoption slowly ramps up.

The hybrid vehicle, particularly the plug in version, has long been something that should have seen more widespread adoption. They are the perfect commuter (electric) / road trip (gas) answer to the perceived problems (gas = rising gas prices/pollution; electric = range/vehicle cost) with ICE. But most people simply overlooked the PHEV as a viable option. Now that EVs are becoming abundant, and seemingly being shoved down the throats of those that never considered them, many EV reluctant ICE drivers are turning to the hybrids as a stepping stone. It makes sense for Ford and other manufacturers to capitalize on this as they build up their EV business.

 

[DevSecOps]

The hybrid vehicle, particularly the plug in version, has long been something that should have seen more widespread adoption.

I agree completely. I've said on this forum many times that Hybrids are overlooked. Some of them, like Prius, even have better EPA emissions over pure EVs, but that just doesn't fit the agenda so it's swept under the rug. You would think that if some of these climate alarmists really cared they would pick the vehicle with the lowest grams/mile.

My R1T emits 200 g/mi emissions (national average) and it's a pure EV (cited)
My MME GTPE emits 170 g/mi emissions (national average) and it's also a pure EV (cited)

A 2023 Prius emits 155 g/mi as an ICE hybrid (cited)

P.S. I know someone wants to reply with "SOLAR"... yeah well these numbers are only upstream and tailpipe emissions. If you have the desire to respond with "solar" do your calculations on emissions for the MachE to be produced + your solar system vs the Prius, otherwise just shhhh!

 

[Mirak]

I agree completely. I've said on this forum many times that Hybrids are overlooked. Some of them, like Prius, even have better EPA emissions over pure EVs, but that just doesn't fit the agenda so it's swept under the rug. You would think that if some of these climate alarmists really cared they would pick the vehicle with the lowest grams/mile.

My R1T emits 200 g/mi emissions (national average) and it's a pure EV (cited)
My MME GTPE emits 170 g/mi emissions (national average) and it's also a pure EV (cited)

A 2023 Prius emits 155 g/mi as an ICE hybrid (cited)

P.S. I know someone wants to reply with "SOLAR"... yeah well these numbers are only upstream and tailpipe emissions. If you have the desire to respond with "solar" do your calculations on emissions for the MachE to be produced + your solar system vs the Prius, otherwise just shhhh!

All true. But I didn’t want to maintain an ICE any longer. And gas stations. But this is back when I figured that surely by 2023 there’d be a much more robust DCFC network.

 

[stealthytolkien]

I love the car. I don’t like how little in resale value it became the moment I bought it, but I still think it is better than my previous car which was a Tesla.

So, I think I can ask these 2 questionsregarding the various articles that are saying that they’re moving to ICE Hybrid.

Could it be that they tried for 4 years and fell way short of even making a dent in the overall EV sales market? For this early investment (infrastructure/mergers) to pay off, there should be signs of growing demand. There’s no meaningful demand and it may actually be nose diving given the absurdity in pricing.

Have the less than average dealer network, below par service centers and lethargic improvements to the infrastructure hurt their EV business?

 

[mkhuffman]

Maybe this has been posted elsewhere but I'm surprised that I haven't seen it come up.

Ford announced that they are cutting investments in EVs and relocating that money to ICE and hybrid:

https://greentechlead.com/electric-...tment-in-money-losing-electric-vehicles-43435

https://www.cnbc.com/2023/07/28/ford-embraces-hybrids-as-it-loses-billions-on-evs.html

https://www.reuters.com/business/au...rofit-view-supply-chain-woes-ease-2023-07-27/

I think this is a smart business decision and it may be time to load up on Ford stock.

Car companies that are going all in on EVs are going to have serious financial difficulties IMO. GM was already bailed out once by the government. Based on all their new EV plans they might need it again. Benz and VW might be in big trouble also. Ford is smart to make some BEVs to get good at it, but not go all in and tank the company.

 

[DevSecOps]

Could it be that they tried for 4 years and fell way short of even making a dent in the overall EV sales market? For this early investment (infrastructure/mergers) to pay off, there should be signs of growing demand. There’s no meaningful demand and it may actually be nose diving given the absurdity in pricing.

Have the less than average dealer network, below par service centers and lethargic improvements to the infrastructure hurt their EV business?

Personally, I think those are all valid possibilities. I have no idea why, but I mean Ford has an obligation to their investors so I'm sure there's a myriad of reasons.

 

[Kamuelaflyer]

The articles explicitly state that Ford is committed to its EV plans

Yet they’re delaying ev rollouts. That’s a rollback in commitment.

The fact that they are shifting some resources doesn't mean they are cutting the EV plans.

Delay is cutting, at least for the short to intermediate term. And delays have a habit of becoming quiet cancellations in some cases.

The hybrid vehicle, particularly the plug in version, has long been something that should have seen more widespread adoption.

I’m not disagreeing with your points really, I tend to agree with them in fact. I’m just trying to present a different take is all.

I’ll see if I can dig up the link, but there’s at least one report that the shift will not be to PHEVs but rather to your plain ol pure hybrid. If true, that may explain part of what is driving this: battery supplies and the premium Ford may be paying to get them.

Back to the original post. The losses Model E is rolling up really aren’t sustainable over the long run. Something does need to change. It’s still disappointing to me as my ancient Tacoma needs replacing and I need a midsized work truck with a proper (“full”) sized bed. And I’d really not like an ice or even a PHEV. The lightning is overkill and overpriced for what I can get compared to what I need and the Rivian is not a consideration for other reasons irrelevant to this discussion.

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