Although electric vehicles are losing heavily, the situation is probably not alarming. Unlike other automakers, Ford is not ready to part with the internal combustion engine, and steady profits from Ford Blue are helping its electric vehicle division relieve pressure.
Ford lost heavily when making electric cars - 2
Ford's product portfolio currently has 3 electric vehicle models, including: Ford F-150 Lightning, Mach-E and E-Transit. In the near future, the company will have an Explorer EV (Photo: Ford).
In the context of Tesla repeatedly reducing the price of the Model Y, Ford must do the same with the Mach-E to be able to compete.
However, Ford determines that making electric cars is a long-term strategy. The company estimates it will lose $3 billion in 2023 because of electric vehicles, more than $2.1 billion in 2022. However, new products are being prepared for launch and production capacity is increasing in the next few years. next year. Ford plans to increase electric vehicle production to 600,000 units by the end of this year.
Electric vehicle making will take years to develop, so if investors see margins increasing over the next few quarters, that could be a good sign.
Tesla CEO Elon Musk recently praised Ford's strategy of making electric cars as wise. In response to the discussion about Ford losing up to 40% when making electric cars, Mr. Musk explained that this is normal when new cars are on the market. Tesla's current profit margin (before taxes and interest) is 15-25% on each car sold. Tesla's net profit is currently nearly 10%.
This is not the first time Mr. Elon Musk has shown support for Ford. In 2021, he congratulated Ford on the launch of the F-150 Lightning model. He also enthusiastically discussed the Mustang Mach-E on Twitter after the model's launch in November 2019.
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