Ford’s BEVs to Lose it Money for Next Three Years
Ford admits it won’t make profits on its BEV business for another three years and stands to lose $3Bn alone this year on the venture.
However, it expects to achieve a pre-tax margin of 8% by late 2026, Reuters reports. This year’s expected losses were revealed before a briefing for investors and analysts to discuss details of the automaker’s new financial reporting format.
From the first quarter results to be announced in May, Ford will begin reporting by business unit for Model e (electric vehicles), Blue (combustion vehicles) and Pro (commercial vehicles and services). Ford projects the BEV division’s cumulative three-year loss from 2021-2023 at $6Bn, including a pro-forma loss last year of $2.1Bn.
Crucially, the company will no longer be reporting regional results after having to report last year that it suffered a pre-tax loss of $600M in China, broke even in Europe and posted a modest $400M profit in South America, with $9.2Bn, most of its earnings before interest and taxes, coming from North America. The company expects its Ford Pro commercial vehicle business to nearly double pre-tax profit this year to $6Bn, while the traditional Ford Blue business should see a modest increase to $7Bn.
Chief financial officer, John Lawler, said Ford no longer will break out financial results by region, only by business unit, because “that’s how we’re running the company now”. He said the automaker will have the global capacity to build 600,000 electric vehicles by the end of 2023 and 2M by late 2026 “and we intend to fully use that capacity”.
— Paul Myles is a seasoned automotive journalist based in Europe. Follow him on Twitter @Paulmyles_
