As Ford invests $50 billion in EVs in the coming years, the automaker has lofty goals in terms of production – it expects to produce 600k all-electric vehicles globally by the end of this year, as well as two million annually by 2026. However, aside from merely making and selling a bunch of these types of vehicles, Ford EVs also have to be profitable, a task that’s proving difficult in a world full of supply constraints and skyrocketing raw materials costs. Regardless, as Ford Authority reported last March, Ford EVs aren’t expected to profitable until second-generation versions begin to arrive, and that’s still the case, as Marin Gjaga, chief customer office of Ford Model e, recently explained to the Detroit Free Press.
“We are not profitable at this moment. We’ve committed to being profitable in ’26,” Gjaja said. “We’re currently on plan. Ford, as a whole, is profitable and throwing off cash that enables us to make that investment. We’re investing in a new part of our business…we’re investing in new products. We will do that and we can do that.”
That profit is currently coming from the automaker’s ICE division – Ford Blue – which is currently focused on making and selling “passion brands” such as the Ford Bronco and Ford Mustang, as well as cash cows like the Ford F-150 and Ford Super Duty pickups. Meanwhile, it continues to develop its range of dedicated EV platforms, which will underpin the upcoming second-generation of Ford EVs, helping to reduce costs in that regard.
In the meantime, we’ve seen the effects of commodities costs on the Ford Mustang Mach-E, in particular, which received substantial price increases late last year, only for The Blue Oval to slash prices this week after the EV crossover’s chief rival – the Tesla Model Y – did the same. However, the automaker opted to not cut Mach-E prices in Europe, as its facing different circumstances in that particular market.
We’ll have more on Ford’s EV push soon, so be sure and subscribe to Ford Authority for more Mustang Mach-E news and ongoing Ford news coverage.
Comments
Prediction: They will never be profitable and Ford will collect corporate welfare from Uncle Sugar Daddy in perpetuity to keep the lie alive.
And yet two days later you say you think you understand what Ford’s game plan is.
Not to worry… with the unprecedented price gouging on ICE-powered vehicles during the “pandemic,” and the record-breaking profits they have enjoyed from selling far fewer cars for far higher prices, I’m sure Ford can continue to pursue its follies.
Sounds like you are fully in favor of the coming no haggle online sales model.
If Ford can only get OTA updates working properly first.
Tell us more!
Your usually sharp witticisms are lagging today RWFA? You seldom engage the topics you disagree with, other than with ridicule. I am hoping you are not a Ford hack, fed and watered by the blog site ha ah ha. It is valid to speculate on decisions made by Mr. Farley and others. I hope even you understand that ‘they cannot all survive’ nor should they… that is not how it works. There is too much capacity and too many brands chasing to few customers saddled by inflated pricing. The economic dynamics and public health challenges of our time are disproportionately responsible for much of Ford’s so called success. BEV’s, Musk, government pressures and save the planet bunch are all players as well. Maybe you might share your vision how it will all shake out…. and humor me with a little more creative forward looking commentary. Always read you!
I respond as the spirit commands. (As said many times, I’m giving away all my stupid for free but if the site wanted to pay me, I’d be open to it but not if I had to change style ir content.)
Some days with fact and analysis and others with ridicule of our friends from the Big Oil K-street troll farm.
In about 1992, I was at a seminar that predicted that within 10 years a wave of consolidation would leave us with ca 6 OEMs.
We saw some consolidation in the late 90’s (think DCX, BMW, VW and Ford PAG), but since then some of these companies have blown up (also GM scattered brands to the wind or graveyard or new owners 20 years later.
Toyota, late to the consolidation party eventually Hoovered up Subaru, Isuzu, Daihatsu, Hino, Mazda, either in whole or part or to increasing degrees of equity.
Similarly, PSE also came late to the party and is stitching up the land of broken toy brands having gobbled up FCA and Opel.
But overall, we have maybe even more car brands than ever before.
It’s not clear to me how it shakes out but I think that companies that are last movers on BEV are going to be in some trouble on a number fronts regarding key IP stack and ownership of high value BOM items, E&E, software, battery design and chemistry.
The Chinese are soon coming with good BEV product, and any company not investing now and scrambling now to get their BEV house in order will be in a lot of headaches, risk and trouble.
As the raw material suppliers and battery producers get tied up with the early movers, the last movers will have trouble to find supply, or will have to pay a premium for incremental capacity, or go with less proven supply sources.
Toyota is already proving this preceding paragraph true because in its scramble to recover from its hyper focus on hyper refining the tech of yesteryear induced BEV slumber. It is already pushing to shift the narrative to “there isn’t enough lithium and everybody should build hybrids with little batteries” (that will fail and they should just get to work catching up.)
Hope that gives you something to chew on.
The good news is that a lot of states are starting to implement a tax on EVs. We all get taxed at the pump so it only makes sense. Like the Transportation Secretary stated EVs are heavier and tear up the roads more, they need to get charged more for that.
LoL Big Oil hoping to scare EV folks off with talk of a road tax.
All Ford needs to do is a Lincoln version of Celestiq, charge $300K+ on something based off the Mach E which costs $50K and enjoy the $250K profit on each.
That sounds like a great plan!
One day we’ll see the singular example in some museum.