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FoMoCo lost $58,391 for every EV it sold during the quarter.
This article was originally published on Robert Bryce’s Subastack page and was repubished here
By Robert Bryce
The ugly EV news from Ford Motor Company just keeps coming. This afternoon, the company reported that it lost $1.224 billion in its EV businessduring the third quarter. In early October, the company reported EV sales “were up 14.8 percent on best-ever sales of 20,962 vehicles.” Thus, simple division shows that the storied automaker lost $58,391 for each EV it sold during the quarter.
The company’s losses on its EV business, known as Model e, for the first nine months of 2024 total $3.7 billion. For reference, that $3.7 billion loss is equal to the profit (Ford calls it EBIT, short for earnings before interest and taxes) it made on Ford Blue, the division that makes internal combustion vehicles.
Alas, these results aren’t surprising. Ford has been hemorrhaging cash on EVs for the past two years. It lost $4.7 billion on EVs in 2023 and $2.2 billion on EVs in 2022. The third-quarter numbers simply show, yet again, that Ford’s leadership has made a colossal blunder. CEO Jim Farley and his lieutenants didn’t understand what motorists want to buy. That’s a bad thing if you’re running one of the world’s biggest car makers.
FoMoCo’s third-quarter losses are being made public just two months after the company announced it was killing a planned three-row, all-electric SUV. In August, the company said, “With pricing and margin compression, we’ve made the decision to adjust our product and technology roadmap and industrial footprint to meet our goal of reaching positive EBIT within the first 12 months of launch for all new models.”
In other words, Ford was warning two months ago that it was having to slash prices on its EVs and that the third quarter would be a stinker. And it was. Also in August, the company said it was going to move some of its battery production out of foreign factories into US locations so it could qualify for more federal subsidies available under the Inflation Reduction Act. As I reported here last year, Ford and other automakers are aiming to collect tens of billions of dollars via the 45X tax credit in the IRA for making batteries in the US. For instance, Ford is building a battery plant in Marshall, Michigan, which is expected to create about 4,200 jobs. According to Good Jobs First, each job at the new Ford plant will cost taxpayers $3.4 million.
While Ford can claim its sales have increased, the fundamental problems in the EV market have not changed. As seen above, the credit rating agency Morningstar, which 13 months ago was forecasting huge growth in EVs, has now turned negative on the sector. In an October 21 report titled, “Are Electric Vehicles Short-Circuiting? Auto Manufacturers Revise Electrification Strategies After Slowing Demand,” (registration required) Morningstar said the major automakers, including VW, Ford, GM, and Mercedes, have delayed their EV plans or slashed planned output due to weak sales. Morningstar noted that while some automakers, including Ford, have cut prices, that has hurt their profitability. It also says that with EV sales “to early adopters now seemingly exhausted, EVs are struggling to maintain ongoing sales momentum among mainstream consumers.”
Morningstar then listed the issues that have plagued EVs for decades:
EV ranges remain significantly affected by extreme weather conditions, with cold weather (i.e., below 40 degrees Fahrenheit) potentially decreasing range by about 25%). Concerns about the EV charging infrastructure are exacerbated by lackluster reliability records of public EV charging stations. Moreover, charging times, notwithstanding significant developments in recent years, remain considerably longer than the typical time it takes to refuel a conventional ICE vehicle. Additionally, while EVs have fewer parts than ICE models and typically require less maintenance than ICE vehicles, one-off repairs (notably involving the EV battery pack) can prove inordinately expensive. Accordingly, across most jurisdictions, insurance premiums for EVs are typically higher than for comparable ICE vehicles, mainly because of the potentially markedly higher repair costs. (Emphasis added.)
That paragraph pretty well sums up the EV marketplace, particularly regarding cold weather, charging infrastructure, and charging times. (See this story on Hertz for more on the repair cost issue.) All those problems have been evident since the days of Edison. So why didn’t Ford and the other automakers see this debacle coming? Was it herd mentality? Were they responding to government pressure? If so, why didn’t they push back? What did they know about EV demand from their own market research?
Here’s my prediction: A few years from now, after the automakers have lost billions more due to their misplaced bets on EVs, business schools and analysts will be asking those very same questions.
Robert Bryce is a reporter, author, filmmaker, and public speaker. He has been writing about energy, power, and politics for more than 30 years
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Categories: Commentary
What is that Car manufactures don’t understand, most people do not want an EV,
and when the Government takes away the incentives , sales really plummet. all these world climate crusaders, flying around in there jets………. hypocrites, is being kind.
I don’t have a problem if you want one, but don’t tell me I have to have one, I’ll drive what I want, and I don’t need a bought and paid for bureaucrat or some local
representative and there agenda for there lobbyist mandating what I need, that would be Vermont’s ” Stupid Majority ” .
Hey liberals, where are the parts on your precious EV made ? , and what parts are made by child labor ?? , and what chemical and toxic metals are in your battery, that the US cannot produce do to EPA regulations, and you think your saving the world,
instead your killing children working these mines……………… your pathetic !!
Wake up people
And there is this from Reuters: WOLFSBURG, Germany, Oct 28 – Volkswagen plans to shut at least three factories in Germany, lay off tens of thousands of staff and shrink its remaining plants in Europe’s biggest economy as it plots a deeper-than-expected overhaul, the company’s works council head said on Monday.
Europe’s biggest carmaker has been negotiating for weeks with unions over plans to revamp its business and cut costs, including considering plant closures on home soil for the first time, in a blow to Germany’s industrial prowess.
Western economic implosion. The only reason why NATO is forcing war with Russia is they have no other way to make money. Spilling blood, death, and destruction is the only industry left to keep the giant ponzi scheme going. The war in the Middle East is no different – they supply both sides of the fence.
In ultra-liberal Vermont, where it is fashionable to hate Elon Musk, about every 30 cars rolling down the road is a Tesla, but I have seen exactly ONE Ford Lightning (F-150) pickup. Dont know how to explain it…?
The useful idiots probably don’t even realize who is behind the Tesla brand. They simply buy an E.V. as they are so ordered.
I view lessening and even mandating choice as coercian — in the case of how we spend our $$$ and on what, when I have MY choice removed (its just POSSIBLE that I ACTUALLY do more research around those choices than do those mandating the lessening of them…and thus, know MY choice is the best i.e. second opinion, doing it differently, innovation = choice), as similar to ‘hostile takeovers’ of companies… and isn’t that exactly what is playing out against domestic buying choices? Do we WANT to BE China and wear uniforms, drive only state approved cars, and access only state approved so-called information (propaganda)?
The demise of electric cars was always going to happen… as that choice was made when the first electric cars were made – in the 1820s – and ditched for the same reasons our current cars won’t fly with consumers: they are unreliable, only operate WELL in temperate to warm climates, are dangerous and explode when overheated, lithium (but we can now dig it up in the US so the news says…no environmental issues there eh?) mined offshore, and…welp…those pesky charging times that outweigh the length of the charge for use… yeah… NOT gonna fly, then, or now.
Oh sheeple.
Sigh.
Horse buggy looking good yet?
Even horse travel will be restricted now due to stormwater pollution concerns…Everyone just stay home.
I’m beginning to think the Amish have it right. The modern world sucks and technology will kill us all.
This is what happens when politicians know the best for people and push mandates for their utopia world that will never be achieved. Politicians know it all. Just from researching a little, I can see the fallacy of it they are expensive, batteries fail in cold weather, need to be hooked up for a while at a charging post, only good for a very miles, not dependable how do they react on snow & ice roads, to replace the battery pack after about 5 years costs almost as the vehicle. A rotten pie in the sky. The manufacturers should send the bill to Biden.