How Ford Loses $3 Billion On America’s Most Popular Car
The Ford F-150 – an oversized pickup truck – is the most popular new car in the United States. It’s been like this for years. Still, Ford managed to reportedly drop $3 billion through 2023 on the F-150 (and Mustang Mach-E).
We need to nuance our headline. Ford doesn’t lose money on the regular F-150, but it does on the F-150 Lightning. According to CFO John Lawler, Ford’s electrical division losses have risen from $2.1 billion in 2022 to a projected $3 billion in 2023.
Ford makes three all-electric models
In the United States, Ford now makes three all-electric models: the E-Transit, the Mustang Mach-E, and the F-150 Lightning. The latter is very popular in North America. At the end of last year, Ford even stopped taking orders.
More than 200,000 orders for F-150 Lightning
The F-150 Lightning was unveiled early last year. As of December, Ford already had more than 200,000 orders for the plug-in pickup. It will take at least three years to redeem them all, which is why second-hand flashes come at bizarre prices.
Ford is now divided into three divisions
Ford will be split into three divisions by the end of 2022: Ford Blue (passenger cars), Ford Pro (commercial vehicles) and Model e (electric models). The latter division makes big losses because the investments are so high.
High investments in EV and battery technology
Ford invests billions in the development and production of electric vehicles and batteries for those electric vehicles, while absolute sales figures are still relatively limited. These must be compensated by the other two units.
And that’s going to work, as Ford Blue and Ford Pro are both projected to be heading towards earnings of $7 billion and $6 billion, respectively, in 2022. Ford expects its Model e electric division to be profitable by the end of 2026.
General Motors much more optimistic
General Motors is more optimistic. His electronics division could be in the black as early as 2025. How is that possible? GM was ahead of Ford in investing in new plants.
No manufacturer makes a profit with its electric vehicles
At the moment there is no car brand that is making a profit with its electric vehicles apart from Tesla. This will of course change in the coming years with increasing production and increasing sales.