A little over one year ago, Ford Motor Company announced that it would be splitting into two different entities – Model e, which is focused on all-electric vehicles, and Ford Blue, which encompasses the automaker’s ICE business. The Blue Oval previously noted that Ford Blue will continue to do the heavy lifting in terms of generating a profit for the company, while the automaker’s EVs aren’t expected to be profitable until the second-generation models arrive in the coming years, particularly since it’s investing $50 billion in that endeavor with a goal of producing two million units annually by 2026. Now, the automaker has updated its financial reporting to reflect the differences in these two sides of the business, as well as its commercial entity, Ford Pro.
As a result, Ford Model e is projected to post a $3 billion dollar loss in 2023, which would be concerning if not for the fact that FoMoCo expects to generate substantial profits from its Ford Blue and Ford Pro sides of the business – $7 billion and $6 billion, respectively. For Ford Blue, that’s a marginal improvement on 2022, but in the case of the automaker’s commercial business, that $6 billion dollar figure is roughly double its earnings in 2022.
Previously, Ford reported financial results as a whole and by regional markets, but there are numerous reasons for this change. Chiefly among them, this new type of reporting presents a fairer representation of each business model’s performance, while also holding each unit accountable for that performance. Finally, it makes these numbers easier to interpret and understand, for both customers and shareholders alike.
“We’ve essentially ‘refounded’ Ford, with business segments that provide new degrees of strategic clarity, insight, and accountability to the Ford+ plan for growth and value,” said CFO John Lawler. “It’s not only about changing how we report financial results; we’re transforming how we think, make decisions, and run the company, and allocate capital for highest returns.”
We’ll have more on Ford’s EV business soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
Comments
Dividing reporting into the three segments is a good idea. This will greatly increase clarity.
I’m surprised Ford lost so little with as much investment as they are absorbing. It took 17 years for Tesla to become profitable.
Agreed on the improved reporting. Better clarity into financials is always a plus for a public company. After all, it’s owned by us the shareholders.
Don’t forget that Tesla kept afloat with free tax payer dollars by selling ZEV credits to the big 3. Then they issued shares of stock to pay for their latest Austin and Berlin plants. It’s like wiping out college debt. Your taxpayer dollars at work for Tesla shareholders.
Real growth is funded from within, like Ford is by using Ford Blue and Ford Pro profits to grow Ford Model e.
Cool!
Not surprising given the huge investments and the relatively small output.
Once all the investments are made, and the supply chain starts cranking out parts and vehicles are able to be assembled at scale that defecit will turn around fast.
Agreed. It will be painful for a few years, but there will be light at the end of the tunnel. Didn’t think Tesla would make it, look at them now.
Easy to increase profits when you’ve increased the costs of Transit vans and pickup trucks by $6k+ each
Better than GM who seems to be prioritizing out of reach 6 figure EVs.
Read elsewhere that a recent poll found that two-thirds of drivers have no interest in EVs. This may not be easy.
Like all the statistics clearly show, Americans don’t care for EVs. Bill Ford said last year the Lighting will be the most important launch for Ford in the last 100 years…and now everyone is calling the launch a complete embarrassment. Go EV, Go Broke.
My disdain for BEV aside…. Mr. Farley is a pretty amazing leader for Ford.
His calls and decisions have all been met with a lot of noise by many on this blog.
Point is, he is a visionary and an astute business man….
This is excellent news. Ford well-positioned to develop their EV product line into significant profitability. Estimates for EV to become profitable by 2026, a dramatically shorter time frame than it took Tesla.
If Mr. Farley can pull this off, do a better job than GM and Stelantis…. he will be ‘Man of the Year’ material.
His calls are distinctly different from many in the industry and he at least appears to acknowledge some of the ‘ugly’ side of BEV’s.
I have no trouble recognizing strong business leadership while not being a fan of BEV for so many reasons ignored by the cheerleaders.
We will see…
Waiting over 5 months on an ordered Escape PHEV and still no word on delivery date maybe that is why their profits are down.