The future may be a little late.
Last year, Ford (F) -) said it would be separating its electric vehicle and internal combustion businesses into two different units: Ford Model e and Ford Blue.
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“We are going all in, creating separate but complementary businesses that give us start-up speed and unbridled innovation in Ford Model e together with Ford Blue’s industrial know-how, volume and iconic brands like Bronco, that start-ups can only dream about," CEO Jim Farley said in a March 2, 2020 statement.
But electric vehicle sales have slowed, with Cox Automotive recently warning that while EV sales records will continue to be set, and EV growth will continue to outpace overall industry growth, "the days of 75% year-over-year growth are in the rearview mirror."
"The hard-growth days are ahead," the firm said.
Transition Taking Longer
Ford recently adjusted its EV production target due to slower-than-expected adoption.
The iconic automaker said it expects to produce 600,000 EVs per year sometime during 2024, compared with earlier estimates that it would reach that goal by the end of this year.
“The transition to EVs is happening, it just may take a little longer,” Chief Financial Officer John Lawler said following the automaker’s second-quarter earnings results, according to CNBC. “It will be a little slower than the industry expected.”
Ford posted stronger-than-expected adjusted second-quartet earnings of 72 cents per share on July 27, topping Wall Street forecasts by 17 cents, with revenues rising 6.8% to $40.5 billion.
However, the automaker said it saw a loss for its Model e unit of around $4.5 billion for the full year, with profits from its Ford Blue rising to around $8 billion.
The contrast underscores Ford's decision to focus on ramping up hybrid production, particularly in its commercial division, over the coming years.
"While EV adoption is still growing, the paradigm has shifted," Ford president and CEO Jim Farley told analysts, according to a transcript of the call.
EV Market 'Volatile'
"We expect the EV market to remain volatile until the winners and losers shake out, and we are confident from a brand, from our incredible product strategy, our software, our scale, and our cost position, we will be one of the winners long term," Farley said.
The company recently lowered the price of its signature electric pickup, the F-150 Lightning, just days after Tesla (TSLA) -) rolled its first Cybertruck off the assembly line.
Ford is not the only one facing EV challenges. General Motors (GM) -) is having trouble producing a new electric vehicle battery pack
"We have experienced unexpected delays in the ramp because our automation equipment supplier has been struggling with delivery issues that are constraining module assembly capacity," CEO Mary Barra said in a July 25 call with analysts.
"We are working on multiple fronts to put this behind us as quickly as possible and things are already improving," she added.
The company posted better-than-expected second quarter earnings, while lifting its full-year profit outlook.
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GM also said it would launch a new generation of its electrified Chevy Bolt, one of the cheapest cars on the EV market, after unveiling plans earlier this year to stop producing the car it first launched in 2016.
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