Ford Model e Q2 shows growth in sales and losses
Ford’s Model e electric car division significantly increased its sales and revenue in the second quarter of 2023, but also widened its losses. Ford is also pushing back a key production target by a year.
Specifically, Ford sold about 34,000 electric vehicles from April to June, nearly three times as many as in the first quarter (12,000 units). Ford Model e sales rose from about $700 million in Q1 to $1.8 billion (€1.64 billion) in Q2. But Ford again posted higher losses on electric vehicles: about $1.1 billion (one billion euros) in April-June, compared to the quarterly loss of $722 million in Q1 2023.
As part of the quarterly report, Ford CEO Jim Farley announced that the planned annual production rate of 600,000 electric cars will not be reached until later in 2024 – previously Ford had targeted this by the end of 2023. Ford does not indicate whether individual plants are responsible for the delay or whether plans have been scaled back slightly globally. Instead, only positive interim statuses in the conversion of the plants are actually published.
The opening of the Ford Cologne Electrification Centre in Q2, where the electric Explorer will be built on the basis of the MEB, is mentioned. In addition, the capacity expansion for the Mustang Mach-E in Cuautitlan, Mexico, was completed and a further expansion of the Rouge plant was initiated. There had also been “significant progress on the construction of a next-generation EV pickup truck plant in West Tennessee and three joint-venture battery supply facilities in Tennessee and Kentucky”. And site preparations are also underway for the construction of the FLP battery plant (with CATL) in Michigan.
Ford attributes the delay to the market environment. “The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford,” Farley says. “EV customers are brand loyal and we’re winning lots of them with our high-volume, first-generation products; we’re making smart investments in capabilities and capacity around the world; and, while others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away.”
The combustion engine business of the Ford Blue division is still disproportionately larger: here, sales in Q2 were 720,000 vehicles, turnover 25.0 billion dollars and Ebit 2.3 billion dollars. However, Ford Pro with its light commercial vehicles and software services was Ford’s strongest division in terms of EBIT in the second quarter: with sales of 15.6 billion dollars, Ford Pro achieved an EBIT of 2.39 billion dollars. The margin here was thus 15.3 per cent.
“The shift to powerful digital experiences and breakthrough EVs is underway and going to be volatile, so being able to guide customers through and adapt to the pace of adoption are big advantages for us,” Farley says.