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Ford EV Lineup Not Expected To Be Profitable Until Second Generation

One of the biggest hurdles to achieving widespread EV adoption remains the high cost of materials required to build those vehicles, which is why EVs are more expensive than their ICE counterparts. Battery costs will eventually decline over time, of course, but for now, automakers like FoMoCo face slim profit margins as each attempt to sell EVs at a reasonable price, a fact that Ford CFO John Lawler recently admitted on the automaker’s capital markets call with investors.

“And so in the near term, our EVs will not be, on a bottom-line basis, EBIT (earnings before interest and taxes) positive,” Lawler said. “And as we start reporting these segments next year, you’ll see that clearly. But we intend, as we get to our second generation of products, that those will have fully competitive margins and be EV positive. And so that will come over time – and be EBIT positive.”

As Ford Authority reported last September, the Ford Mustang Mach-E program is already profitable, though it’s quite possible the automaker knows that making money on the Ford F-150 Lightning, E-Transit, and European EV(s) built on Volkswagen’s MEB platform may present more of a challenge, at least in terms of the high costs associated with developing and ramping up production for those models.

Regardless, Ford is already working on its second generation of electric vehicles, which will ride on brand new dedicated platforms and utilize the automaker’s IonBoost power systems. FoMoCo is investing heavily in these endeavors, however, dedicating $7 billion to the new Ford Blue Oval City complex as part of its larger $50 billion investment as it aims to produce two million EVs annually by 2026.

We’ll have much more on Ford’s electric vehicle strategy soon, so be sure and subscribe to Ford Authority for around-the-clock Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comments

  1. Steve

    So what you’re saying is hardly anyone is willing to buy a EV, at least not enough to recoup the investment. Sounds like a strong business plan to me. Let’s make something that will immediately be a loss and cross our fingers we make it back the 2nd time around? What sales guy is so good to convince a major corporation to invest millions into something that becomes a bust, then to keep going until they make it all back. I really hope these decision makers don’t play Blackjack. One hell of a sales guy though.

    Reply
    1. Stephen Ketterer

      Typical government hocus pocus using tax money to “create popularity” for a bad idea.

      Reply
  2. Montana Man

    Sounds like you don’t understand economics.
    In America, we all understand that it takes money to make money.
    I guess it’s not the case where you live.
    Amazon posted straight losses for years after going public. Jeff Bezos is so good to convince a major corporation to invest millions—and then billions—into something that has never become a bust. Oh—another name you might recognize: Tesla, and Elon Musk; he can’t build those cars fast enough.
    Henry Ford didn’t make a profit until the 5th year of the Model T.
    Please share your sources to indicate hardly anyone is willing to buy and electric vehicle; Ford themselves can share their sales and reservation numbers with you. As a shareholder of Ford stock, as well as an owner of personal and commercial Ford trucks, I’d like to assure you that my family and I are strongly in that “hardly anyone” camp, with three Lightnings reserved.
    Just like little kids can’t do anything but consume food, space and time from their parents until they’re old enough to get jobs and earn money themselves, an investment in a future is still a wise move.

    Reply
    1. David Dickinson

      Tesla is an accounting gimmick waiting to implode. Amazon has made products cheaper for consumers, which is why they are fabulously successful. EVs are taking a product and making it more expensive. That is a loosing business model.

      Reply
  3. David Dickinson

    Why the push for EVs and all the EV gyrations? Here is a synopsis that explains why the automotive world has gone mad (answer: the government)…
    “Eleven states require automakers sell a certain percentage of zero-emissions vehicles by 2025. If they can’t, the automakers have to buy regulatory credits from another automaker that meets those requirements — such as Tesla, which exclusively sells electric cars. It’s a lucrative business for Tesla — bringing in $3.3 billion over the course of the last five years, nearly half of that in 2020 alone. The $1.6 billion in regulatory credits it received last year far outweighed Tesla’s net income of $721 million — meaning Tesla would have otherwise posted a net loss in 2020. “These guys are losing money selling cars. They’re making money selling credits. And the credits are going away,” said Gordon Johnson of GLJ Research and one of the biggest bears on Tesla (TSLA) shares.”

    Reply
    1. David Dickinson

      PS Rivian posts results after the bell today. It will be interesting to see what they say.

      Reply
      1. Mike

        It was not good. Going the way of Lordstown.

        Reply
  4. NCEcoBoost

    By the time Ford would have recouped this absurd investment, it’ll have been toast.

    Reply
  5. Thurston Munn

    The Edsel of the 21st century. Good luck Ford, sold all of my stock while it still had value.

    Reply

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