In the first quarter of 2021, Ford’s Model e electric vehicle segment faced a loss of 1.3 billion USD, translating to 132,000 USD for each car sold. Despite selling 10,000 electric vehicles in the first quarter, a 20% decrease from the previous year, revenue from this segment decreased by 84% to just 100 million USD due to intense competition and price wars in the industry. This has resulted in significant losses before taxes.
John Lawler, Ford’s Chief Financial Officer, mentioned that the price war among electric vehicle manufacturers has been ongoing for nearly two years and has made it challenging to achieve profits. However, despite reducing costs by $5,000 per Mustang Mach-E, sales continued to decline rapidly. Ford CEO Jim Farley stated that the company is making changes in the electric vehicle segment to potentially achieve profitability with the next generation of cars.
Ford is not alone in their transition from gasoline cars to electric cars in the upcoming years. They are one of many traditional car manufacturers who are facing immense pressure to shift towards sustainable transportation options. Unlike other car companies that have not disclosed results specifically for their electric vehicle segments, Ford stands out as they provide detailed data about their losses and progress in this area. Last year, the Model e segment incurred a loss of 4.7 billion USD with only 116,00 units sold.
Although not all electric vehicles sold by Ford fall under the Model e segment, Ford Pro handles high-volume sales to business and government customers. The demand for electric vehicles in this segment is substantial with recent orders for models like E-Transit and F-150 Lightning showing promise. While Ford Pro mainly focuses on selling gasoline cars and witnessed more than double pre-tax profit in last quarter with an increase in revenue and units sold compared to Blue which sells gasoline cars to consumers experienced a decline in revenue and units sold along with a profit of just 9
