Ford Reports MASSIVE Loss On Every Electric Vehicle It Produced In The First Quarter

Ford's recent foray into electric vehicles, largely spurred by the Biden administration's efforts to encourage car manufacturers to embrace the new technology, has prompted significant losses for the American-made manufacturer as consumer demand for the pricey vehicles falls off. According to Ford's first-quarter earnings, the company's EV unit revealed on Thursday that it lost $132,000 per vehicle for every vehicle it sold in the first three months of 2024.

While Ford's first quarter earnings were positive news for the company, with its stock rising 2.4 percent in after-hours trading, the automaker's profits were largely driven by traditional gas-powered and hybrid vehicles as EVs continued to be a burden. According to CNN, Ford's EV department only sold 10,000 vehicles in the first quarter, a 20 percent decrease year-over-year, which led to its revenue plummeting 84 percent to just $100 million. These factors, driven by slumping consumer demand and price cuts throughout the industry, resulted in Ford losing $1.3 billion.

Despite the significant losses, Ford's leadership remains optimistic. In a call with analysts, an executive revealed the company's plan to launch a profitable electric vehicle priced between $25,000 and $30,000. This, they believe, presents a substantial opportunity for Ford, particularly as these more affordable EVs could serve as excellent platforms for the company's "software and services." The executive also clarified that a significant portion of the $1.3 billion loss was due to research and development for the next generation of Ford's electric fleet. 

In a call with investors, Ford CEO John Lawler explained that a price war over the past year has prompted the company to slash prices to compete with rivals, citing the $5,000 price cut for the Mustang Mach-E. "Revenue is dropping faster than we can take out the cost," he said, per CNN. Lawler explained that the next generation of EVs will allow the company's EV unit to turn a profit given the extensive amount of funding the research and development department has received. The Ford F-150 Lightning currently sits at an MSRP price of $54,995, and the Ford Mustang Mach-E sits at an MSRP price of $39,995.

Ford's earnings, which exceeded expectations, were driven by the Ford Pro unit's focus on gas-powered vehicles. Chief Executive Jim Farley expressed confidence in the unit's long-term profitability and durability, stating, "And I'm not sure the full market understands that." The company also experienced a significant boost in hybrid vehicle sales, which surged 36 percent in the first quarter. 

The CEO's assurance that a more affordable electric vehicle will be hitting the market in the coming years comes after Tesla announced that it is committed to developing a "more affordable" vehicle in its fleet.

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