Ford loses this bizarre amount of money on every electric car it sells

Ford is fine. In the first three months of this year, the bottom line was a considerable profit. But that’s only due to the success of the Blue Division, which makes gasoline cars. The electric offshoot of the Model e is deep in the red.

Just over a year ago, Ford split its company into three divisions: Blue for gasoline-powered models, Model e for electric vehicles, and Pro for commercial vehicles. And that makes the financial results extremely interesting.

Lots of wins and lots of losses for Ford

Because we can now see exactly where the profit is made and where the money is flushed down the drain, so to speak. Because Blue produced in January, February and March 80,000 more vehicles than in the previous year and made $ 2.6 billion in profit.

The Model e — which delivered about 12,000 electric vehicles in the first quarter — isn’t faring so well right now. The loss was $700 million, which is exactly $58,333 per car produced. Oof!

So Ford is putting nearly $60,000 on each Mustang Mach-e or F-150 Lightning. That sounds bad – and of course it is – but there is a clear explanation for it.

Ford is investing heavily in EV factories

First, the Mustang Mach-e plant in Mexico was temporarily closed, reducing the number of electric vehicles produced in the first three months of 2023. Ford is in the process of increasing the plant’s capacity to 210,000 cars per year.

In addition, Model e has invested $3.5 billion in a battery factory in Michigan and a manufacturing facility in Tennessee, among other things, where the next electric pickup will be built.

Expanding production costs money

As various electronic startups, including Rivian, Lucid and also the Dutch Lightyear, are finding out, it costs bizarre sums to expand production.

We don’t have to worry about Ford, however; the American car giant will remain. Forecasts call for the Model e division to post a loss of $3 billion for all of 2023. And the company has to go through with it.