Ford electric vehicle unit Model e reported a tremendous loss on every unit it sold in the first quarter of the year, CNN Business reported.
Ford Model e’s Q1 2024 financial results
According to the report, Ford Model e lost $1.3 billion in Q1 2024. This figure equates to $132,000 for every unit of the 10,000 electric vehicles it sold in the said period. In effect, Ford’s overall earnings also recorded a huge decline.
Ford Model e’s 10,000 electric vehicle sales in Q1 2024 represents a notable 20% decline compared to the prior year.
Moreover, it also reported a huge revenue drop of 84% to approximately $100 million. Parent company Ford contends that these losses were primarily due to the ongoing price cuts in the electric vehicle industry.
Consequently, the company lost a whopping $1.3 billion in earnings before interest and taxes (EBIT) on top of the Model e’s huge per-vehicle loss.
According to Ford Chief Financial Officer John Lawler, the ongoing price war has impeded the company to profit from its EV business. Ford has apparently cut each Mustang Mach E’s costs by approximately $5,000.
Ford Pro unit sees strong demand
It is worth noting that Ford does not assign all its electric vehicle sales and distribution to Model E unit. Some of its EV offerings, primarily for businesses and government fleets, are under the Ford Pro unit.
The Ford Pro reportedly received strong electric vehicle demand, including the US Postal Service’s order of 9,250 E-Transit vans. Ford Pro is expected to fulfill the order by the end of 2024.
Ecolab also ordered 1,000+ F-150 Lightning pickups and Mustang Mach-E SUVs for its fleet.
Competition
American legacy automaker General Motors proudly announced earlier this week that it is still on track to gain profitability in its electric vehicle business in North America in the second half of 2024.
Multinational automaker Stellantis, owner of multiple brands Ram, Dodge, and Chrysler, reported that it had already achieved profitability in its European operation in 2023.
On the other hand, electric vehicle giant Tesla reported a notable 48% drop in its adjusted earnings in Q1 2024. Its revenue also declined 9% due to a year-on-year sales plunge, marking its first since the COVID-19 pandemic.
Despite the tremendous losses in electric vehicles, CEO Jim Farley assured its investors in a recent earnings call that it plans to revamp its EV business. The Ford boss emphasized that the next-gen EVs will enable the company to gain profit in the near future.
