by Leslie Eastman at legalinsurrection.com
The company could lose $3 billion from EV sales to consumers this year
The only thing about green energy that might be truly green is the river of cash the technology is bleeding.
Ford Motor Company recently released its first-quarter earnings of the year. The results were mostly good…except for its electric vehicle unit.
Ford (F) reported first quarter revenue and earnings that topped Wall Street expectations on Tuesday while also breaking out results for its EV segment for the first time, where losses totaled more than $700 million in Q1.
Revenue came in at $41.5 billion for the quarter, up 20% from last year and beating expectations for $36.1 billion. Earnings per share came in at $0.63, more than the $0.41 expected by analysts. Last year, Ford reported a net loss of $3.1 billion during its first quarter due to losses related to its investment in EV maker Rivian (RIVN).
In a separate release on Tuesday, Ford announced it would be re-opening orders for its all-electric Mustang Mach-E on Wednesday with prices lowered by up to $4,000 for some models.
Ford stock was down about 1% in after-hours trading following these results.
The projections for 2023 for its electric vehicle unit point to potential losses of $3 billion.
But the company expects to be making money soon!
Ford (F) said it will lose $3 billion on its sales of electric vehicles to consumers this year, but it still expects to hit the profit targets it set for this year of between $9 billion and $11 billion.
Ford said those EV losses and the overall profit both come before expenses from interest and taxes. The $3 billion loss is roughly equal to what it lost on EVs on that basis the last two years combined. It said it lost about $900 million in 2021 and $2.1 billion in 2022. It’s the first time it gave a breakout of the results from its EV operations.
But it said it still expects EVs to start making money soon, going from a 40% operating loss margin last year, when it sold about 96,000 EVs, bringing in $5.3 billion in revenue, to about an 8% profit margin by the end of 2026. It expects increased production of EVs to bring global product of those vehicles to a 2 million annual rate by the end of that year.
Interestingly, price drops to be competitive among competitors have also fit into Tesla’s profit margins, dropping by 24 percent. Additionally, there are signs that the demand for EV’s is softening.