(DailyVantage.com) – The golden age of electric vehicles (EVs) the Biden administration is pushing for may not be as shiny as some might expect, after Ford reported massive losses of $1.3 billion in its EV department.
In its most recent earnings report, the American car company reported that the losses were for the first quarter of the year alone, amounting to a loss of $132,000 for each of the 10,000 EVs Ford produced for the first three months of this year. Ford also reported that sales of its Model E EV were down 20% for the most recent quarter, compared to sales of the vehicle for the same period last year. Revenue also tumbled 80% to $100 million.
Ford said that the sharp decline in revenue was due to the lower prices and demand for its EVs across the country. With many more automakers offering their own EVs, Ford has struggled to compete in pricing. Ford CFO John Lawler provided more context, explaining in the call that “revenue is dropping faster than we can take out the cost” – and that’s despite cutting prices on its EV offerings, such as $5,000 off its Mustang Mach-E.
The car manufacturer also said that it has yet to see returns on money spent for research and development for EV technology.
All in all, Ford said that expects to see total losses for its Model E EV amount to as much as $5 billion for the entire year.
Total net income for the company for the first three months of this year amounted to $1.3 billion, with losses from its electric vehicle division offset by gains provided by its Ford Pro fleet division. The Pro fleet division netted the company $3 billion for the quarter, or $7,300 per the 400,000 units it sold. Ford also made a profit, albeit smaller, from its Ford Blue division, selling more than 600,000 vehicles at a $1,400 markup for each one.
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