It's just the latest bad news for Ford Model e, which lost $2.1 billion in 2022. The disappointing figures were part of the carmaker's second quarter financial results that were released last week.
Ford also announced that it would be slashing the price of its F150 Lightning electric pickup truck on account of lower-priced raw materials for batteries. The price reduction will also help the truck qualify for a $75,000 consumer tax credit that is only given for vehicles with a price tag of less than $80,000. Right now, Ford has 90,000 unsold battery-powered vehicles in stock; this is double the average for the industry as a whole.
The company announced that it expects to produce around 600,000 electric vehicles per year by the end of next year, a rate that they had previously expected to hit by the end of this year. They have also pushed back their estimate on when they expect to produce 2 million electric vehicles per year to 2026.
These shortcomings come despite heavy subsidies from the Biden administration via policies such as the Inflation Reduction Act. This includes credits for producing the batteries for electric vehicles as well as tax credits for the cars themselves.
The company cited the pricing environment for electric vehicles as one of the drivers behind it losses. Tesla has been implementing a series of price cuts throughout the year, and other carmakers such as Ford have followed suit with their own price cuts. The company reportedly lost about $32,000 for every electric vehicle they sold during the second quarter.
Ford's chief financial officer, John Lawler, tried to appear upbeat when discussing the disappointing performance. He stated: “The transition to EVs is happening, it just may take a little longer. It will be a little slower than the industry expected.”
Last month, the Biden administration extended a $9.2 billion loan to Ford and SK On, its South Korea-based business partner, to build a trio of electric vehicle factories in the southern part of the U.S. Shortly afterward, the company announced its plans to lay off 1,000 employees in North America.
Ford turns attention to hybrids amid disappointing EV sales
In the face of steep losses on electric vehicles, Ford appears to be shifting more toward hybrids. CEO Jim Farley said: “You’re going to see a lot more hybrid systems from us.”
Although they are spending billions of dollars ramping up their production of electric vehicles, their efforts to offer more hybrid options are inspired by the popularity of their current gasoline-electric vehicles. Farley noted that more than 10 percent of customers buying F-150 pickups have been choosing their hybrid model. He added: “We have been surprised, frankly, at the popularity of hybrid systems for F-150.”
When it comes to their smaller Maverick pickup, hybrid uptake has been even higher, with 56 percent of those choosing Mavericks springing for an optional $1500 hybrid power train rather than the four-cylinder engine that comes standard on the truck.
Although Ford's losses on all electric vehicles may be on the rise, profits from its traditional vehicles are making up for it, with the company beating Wall Street expectations. It earned $0.72 per share during the second quarter, which is much better than the $0.55 per share that analysts expected. Their revenue rose during the quarter by 12 percent to $42.4 billion, beating forecasts by $2 billion.
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