Ford debuted a new financial-reporting structure Thursday while offering one of the first in-depth looks at EV profitability from a traditional automaker. Ford stock closed modestly lower.
Ahead of a "teach-in" for analysts and reporters, Ford revealed that it lost $2 billion producing electric vehicles in 2022 — and that it expects losses to swell 50%, to $3 billion, in 2023.
In a big break from the past, the auto giant plans to start breaking down its financial results by three new business entities, instead of by geographic region.
Those entities include Ford Blue, holding the legacy internal combustion engine (ICE) and hybrid vehicle business; Ford Ford Model e, containing the emerging electric vehicle (EV) and software businesses; and Ford Pro, targeting commercial and government customers.
Ford Losing Money On EVs
On Thursday, Ford disclosed that Ford Blue and Ford Pro made $10 billion in operating profit last year, vs. the sharp losses for Ford Model e, its emerging EV business.
Ford also backed full-year 2023 earnings before interest and taxes (EBIT) guidance of $9 billion-$11 billion.
By business segment, Ford expects about $7 billion in 2023 EBIT for Ford Blue, "a modest improvement from last year," Ford said in a release. It expects nearly $6 billion in EBIT for Ford Pro, "nearly twice its 2022 earnings." But it sees a loss of about $3 billion for Ford Model e, up sharply from $2 billion in 2022.
The company also reaffirmed a 10% EBIT margin target by the end of 2026.
F Stock, EV Stocks
Shares of Ford rose nearly 2% on the stock market today before surrendering gains. Shares closed down 0.5%, at 11.42.
F stock trades well below its January 2022 peak. A consolidation begun in August has a 16.78 buy point, the MarketSmith chart shows. The 50-day line has remained stuck under the 200-day line since early 2022, a sign of long-term weakness.
Shift to electric vehicles
Traditional automakers are making a bold and costly shift away from gas and diesel vehicles to electric vehicles.
Ford and General Motors continue to chase Tesla and China's BYD in the high-stakes EV race.
On Thursday, Ford reaffirmed its target for a 600,000 unit global EV production run rate by the end of 2023. It's targeting 2 million units by the end of 2026.
The production ramp should help Ford reach its target of 8% EBIT margin for Model e by the end of 2026, the company said.
Tesla sold more than a million EVs globally last year, including more than half a million domestically. BYD sold nearly a million battery electric vehicles last year, mostly in China. Both did so profitably.
By comparison, Ford sold 61,575 EVs in the U.S., its top market, in 2022.
Like Ford, General Motors is losing money on EVs now. GM anticipates its EV business will be "solidly profitable" by 2025.
