In the first quarter of 2021, Ford’s Model e electric vehicle segment faced a loss of 1.3 billion USD, translating to 132,000 USD for each car sold. The company reported that they had sold 10,000 electric vehicles in the first quarter, a 20% decrease from the previous year. Despite reducing costs by $5,000 per Mustang Mach-E, sales continued to decline rapidly.
Ford CEO Jim Farley stated that the company is making changes in the electric vehicle segment to potentially achieve profitability with the next generation of cars. John Lawler, Ford’s Chief Financial Officer, mentioned that the price war among electric vehicle manufacturers has been ongoing for nearly two years, making it challenging to achieve profits. He also highlighted that revenue from this segment decreased by 84% to 100 million USD due to a price war in the industry.
Although not all electric vehicles sold by Ford fall under the Model e segment, Ford Pro handles high-volume sales to business and government customers. The demand for electric vehicles in the Ford Pro segment is substantial, with recent orders for electric vehicles like the E-Transit and F-150 Lightning showing promise. According to Ford’s financial report for Q1 2021, Pro mainly focuses on selling gasoline cars and witnessed more than double the pre-tax profit in the last quarter due to an increase in revenue and units sold.
On the other hand, Ford Blue, which sells gasoline cars to consumers experienced a decline in revenue and units sold but recorded a profit of 905 million USD. Competitors like General Motors and Stellantis have reported positive business results in the electric vehicle segment indicating varying success across different companies in this area of business. Tesla reported a decrease in profits and revenue in Q1 2021 as well despite being one of largest players in this sector.
In conclusion, while some traditional car manufacturers are transitioning from gasoline cars to electric cars successfully others are struggling with losses such as Ford’s Model e segment which faced significant losses before taxes due to intense competition from other manufacturers leading them to make changes