In the first quarter, Ford’s electric vehicle segment, Model e, experienced a loss of 1.3 billion USD, equivalent to 132,000 USD per car sold. The sales of electric vehicles in the first quarter of the year were 10,000 units, a 20% decrease from the same period last year, with revenue declining by 84% to 100 million USD. The main reason for these losses was the price war in the electric vehicle industry.
John Lawler, Ford’s Chief Financial Officer, attributed the challenges in achieving profits in the electric vehicle segment to a price war that has been ongoing for nearly 2 years. Despite reducing costs by $5,000 per Mustang Mach-E, sales continued to decline. CEO Jim Farley mentioned that Ford is making changes in the electric vehicle segment to ensure profitability in the next generation of cars.
Ford, like other traditional car manufacturers, is transitioning from gasoline cars to electric vehicles. While Ford Pro, a segment focused on high-volume sales to business and government customers, has shown significant demand for electric vehicles, it mainly sells gasoline cars. The Ford Pro segment recorded a pre-tax profit increase in the last quarter, while the Ford Blue segment, which sells gasoline cars to consumers, experienced a decrease in revenue.
Ford’s competitors in the electric vehicle segment, such as General Motors and Stellantis, have reported different business results. General Motors expects its North American electric vehicle segment to be profitable in the second half of the year, while Stellantis has been profitable in the electric vehicle sector since last year. Tesla, on the other hand, reported a decrease in first-quarter profits and revenue.
While Ford continues to make changes to improve profitability in its electric vehicle segment, the competition in the industry remains fierce. Despite the challenges, Ford is optimistic about the future of electric vehicles and is working towards a sustainable and profitable business model in the rapidly evolving market.