Despite higher volume, industry experts calculate Ford lost around $36,000 for every electric vehicle it sold in the quarter, up on its estimated $32,350 loss per EV in the second quarter
Ford Motor Company’s third-quarter earnings revealed rising electric vehicle losses caused mainly by slowing demand and off the back of an EV price war initiated by Tesla at the start of the year.
Shares of Ford Motor Co closed down 12.3% on Friday, after the automaker reported a wider loss from its electric-vehicle (EV) business due to pressures from a price war, sparked by industry leader Tesla. Battery cots were cited as a major factor in Ford reigning in its planned investment timeframe.
The Detroit automaker also pulled its 2023 forecast, citing “uncertainty” over the pending ratification of its new labor deal with the United Auto Workers (UAW) union, which is expected to significantly increase labor-related expenses.
Figures revealed Ford managed to sell 20,962 electric vehicles in Q3, beating General Motors by a slight margin thanks largely to the success of the Mustang Mach-E production – Mach-E sales rose 42.5 percent in Q3 with 14,824 units sold, 5,872 of which in September alone.
The carmaker’s EV deliveries increased by 44 percent, leading to a 26 percent growth year-over-year in revenue to $1.8 billion for the Ford Model e EV unit.
Ford cautioned about ongoing challenges in its EV business and said it was cutting production of its Mustang Mach-E while scaling back about $12 billion in investments in the segment, including delaying its second battery plant in Kentucky.
“We believe that the rise in battery raw material costs has negatively impacted the outlook for BEV (battery electric vehicles) profitability, and consequently, Ford’s profitability,” Wells Fargo analysts wrote in a note.
The company’s quarterly report added to the gloom around the EV market, which has seen inflation-wary consumers pull back on some purchases.
Two days before the report, the UAW and Ford reached a tentative agreement that entails a 25% wage increase for 57,000 workers over a span of nearly five years, effectively putting an end to the strike at some of the automaker’s largest factories.
Read more about Ford’s shares fall on Reuters HERE
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