Ford Projects Its EV Division Will Lose Billions This Year

The Ford Motor Company is moving aggressively toward the production of electric vehicles, but that choice may pay the Michigan-based automaker billion this year alone.

Ford said Thursday that it expects its EV division will lose $3 billion in 2023 as it pushes to produce more vehicles and build electric battery plants in Kentucky, Tennessee, and Michigan, The Financial Times reported. The carmaker wasn’t surprised by the massive loss of money as it views its EV division, known as Model e, as a “start-up.” 

According to John Lawler, Ford’s chief financial officer,” Ford Model e is an EV start-up within Ford, and as everyone is aware, while they invest in abilities, develop knowledge, build mass and gain show, they lose money.”

Despite the setbacks, Ford keeps moving forward and hopes to produce two million electric vehicles annually by 2026, giving its EV department an 8 % profit margin. For EV sales in the United States, the organization is lagging Tesla of Elon Musk and trailing the electric vehicle behemoth. Before turning a profit in 2013, Tesla, which was founded in 2003, lost funding for ten days. In 2022, Musk’s business earned$ 12.6 billion, a significant increase from$ 5.5 billion in 2021.

According to The Financial Times, Ford intends to go into more details about its financial situation with people and how it will maintain its commitment to selling only zero-carbon output vehicles by 2040. Ford’s production of gas-powered vehicles, known as Ford Blue, is a key source of funding for the automaker as it makes the switch to electric vehicles( EVs ).

Ford Blue is anticipated to earn$ 7 billion this year, and Ford Pro, the company’s division for commercial vehicles, is predicted to double its revenue from last year to$ 6 billion. Lawler attributed the carmaker’s EV losses to spending on original and plants and power technology.

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Last month, the carmaker was criticized for collaborating with a Chinese company to build a battery plant in Michigan. In its proposal, Ford said it would partner with the Chinese company Contemporary Amperex Technology on the plant that would employ 2,500 people when it begins production in 2026. 

Virginia Republican Gov. Glenn Youngkin withdrew his state from consideration for the new battery plant because of Ford’s partnership with the Chinese company. Michigan Democratic Gov. Gretchen Whitmer, however, has pushed for the battery plant to come to the Great Lakes State and celebrated Ford’s decision to build the plant in Michigan.