In a recent announcement, Ford Motor has revealed that its electric vehicle (EV) business has incurred a pretax loss of $3 billion in the last two years, and it is expected to face the same amount of loss this year as well. According to Ford’s Chief Financial Officer (CFO), John Lawler, the EV unit, named ‘Model e’, should be viewed as a startup. This means that, like many startups, Ford’s EV business is expected to face losses as it builds knowledge and gains market share in the EV industry.
Ford’s foray into the EV market comes at a time when the global automotive industry is undergoing a major shift towards electric mobility. In recent years, several automakers, including Tesla, General Motors, and Volkswagen, have launched their EVs, and Ford aims to compete with them by introducing its own range of electric cars. However, Ford’s journey into the EV market has not been without its challenges, and the $3 billion loss incurred by its EV unit is a testament to this fact.
Explaining the losses incurred by its EV business, Lawler said that it is natural for startups to face losses initially, as they invest heavily in research and development, marketing, and production to establish their presence in the market. He added that Ford’s EV business is still in the early stages of development and will take time to become profitable. However, he also expressed confidence that Ford’s investment in EVs will pay off in the long run, as the company aims to become a leader in the electric mobility space.
Despite the losses, Ford has made significant progress in its EV efforts over the past year. In September 2021, the company unveiled its first all-electric pickup truck, the F-150 Lightning, which received an overwhelming response from customers. The company has also invested heavily in developing electric versions of its popular models such as the Mustang and the Explorer. Furthermore, Ford plans to invest $22 billion in electrification through 2025, with a target of having 40% of its global sales to be electric vehicles by 2030.
In addition to its EV efforts, Ford is also investing in other areas such as autonomous vehicles, connected cars, and mobility services. The company aims to transform itself from a traditional automaker to a mobility company that offers a range of transportation solutions to its customers. This transformation is crucial for Ford’s long-term success, as the automotive industry undergoes a major shift towards mobility services and shared mobility.
Despite the challenges faced by Ford’s EV business, the company remains optimistic about its future prospects. With its significant investments in EVs, and the launch of its impressive F-150 Lightning pickup, Ford is well-positioned to compete with other major players in the EV market. As the world moves towards a greener future, it is imperative for automakers to invest in electric mobility, and Ford’s efforts in this space are a step in the right direction. Although the road ahead may be bumpy, Ford’s willingness to embrace change and adapt to new technologies bodes well for its future success.