Ford’s electric vehicle unit “Model e” suffers $722M loss in Q1 2023
Ford EV
Dearborn, Michigan-headquartered automobile giant Ford Motor Company has reported first-quarter (Q1) net income of nearly $2 billion, marking reversal from a loss of more than $3 billion a year ago.
In the January through March quarter of 2023, Ford generated a net income of $1.8 billion. In the corresponding quarter of 2022, the company had suffered a loss of $3.1 billion. Q1 revenue jumped 20 per cent year-over-year to settle at $41.5 billion as the total number of shipments approaches 1.1 million units. The company finished the quarter under review with margins of 8.1 per cent, up 1.4 percentage points from the year ago period.
Ford maintains its projection that losses at the Model e EV business will rise nearly 50 percent to $3 billion this year.
Jim Farley, chief executive of the company, noted that the first quarter of running the company on behalf of separate customer groups (Ford Blue, Ford Model e, and Ford Pro) produced robust operating results. The business model also provided a glimpse of the promise of the company’s Ford+ growth plan.
However, not all of the company’s new divisions were in the black in the quarter under review. While the Ford Blue ICE-powered business and Ford Pro commercial vehicle unit posted profits of $2.6 billion and $1.36 billion, respectively; the Model e EV business unit reported a loss of $722 million.
Reaffirming its guidance for the full-year, Ford noted that it expects losses from the Model e EV business to increase nearly 50 per cent to $3 billion in 2023.
Previously, the automobile giant announced that it set aside huge amounts of money to invest heavily in Model e to develop innovative EVs along with revolutionary digital capabilities for deployment across complete product line of the company.
It is worth noting here that interruptions in the production of the Mustang Mach-E and F-150 Lightning pickup played a key role in the Model e’s Q1 loss. The company had to make several industrial changes at its Mexico production plant to increase manufacturing capacity.
Besides boosting capacity for the Mustang Mach-E and F-150 Lightning, the Model e will also build its next-generation all-electric pickup truck at the BlueOval City Complex, which is currently under construction in Stanton, Tennessee.
For the current year, Ford has set an ambitious aim to achieve a global production run rate of 600,000 EVs. By the end of 2026, it intends to boost the production run rate to more than two million units.
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