Ford’s Electric Vehicle Woes: Q1 2024 Sales and Earnings Plummet
Ford’s first quarter 2024 business report reveals a 20% decline in electric vehicle (EV) sales, with only 10,000 units sold. Consequently, Model e, the company’s electric division, witnessed a drastic 84% drop in revenue, plummeting to $100 million.
This resulted in a staggering $1.3 billion loss in just three months. On average, Ford incurred a colossal loss of approximately $130,000 (3.3 billion VND) for each of the 10,000 electric vehicles sold.
In comparison to Model e’s loss of $4.7 billion in 2023 from 116,000 vehicles sold, the average loss per vehicle last year amounted to $40,525, a mere one-third of the loss incurred in the first quarter of 2024.
Ford F-150 Lightning electric pickup truck.
Analysts attribute Ford’s significant losses to the ongoing price war in the electric vehicle market, an observation acknowledged by John Lawler, Ford’s chief financial officer.
Lawler stated that the price battles witnessed in the EV market over the past year and a half have made profitability extremely challenging. According to him, Ford reduced the cost of the Mustang Mach-E electric vehicle by $5,000; however, “revenue is declining faster than we can offset it with cost.”
Ford Mustang Mach-E electric SUV.
Despite the EV losses, Ford CEO Jim Farley expressed optimism, stating that the company is implementing changes to its Model e division. These adjustments aim to revitalize Model e’s revenue and subsequently generate profit. Farley also promised that the company’s upcoming generation of electric vehicles will enable Ford to achieve profitability in the near future.
In addition to the Model e restructuring, Ford is prioritizing EV sales in its Ford Pro division, which caters to businesses and government agencies.
Ford Pro has recently secured an order for 9,250 E-Transit electric delivery vans from the United States Postal Service (USPS). They have also received orders for over 1,000 F-150 Lightning electric pickup trucks and Mustang Mach-Es from Ecolab.
Ford is not the only American automaker experiencing declining profits. Tesla, a major player in the EV market, reported a 48% drop in its Q1 earnings and a 9% decrease in revenue compared to the same period last year.
