Ford Motor Co is expecting its loss on electric vehicle (EV) business to grow to US$3 billion in 2023, The Detroit News quoted the US automaker Thursday as saying.
The Dearborn-based company lost US$900 million in EV business in 2021 and US$2.1 billion in 2022.
Ford Chief Financial Officer John Lawler attributed the uptick in EV losses to the large investments Ford is making to scale up its EV business. Ford is investing billions of dollars in developing its second- and third-generation EVs, and building numerous EV battery plants, he said.
Meanwhile, Ford is moving to scale up EV production to an annual run rate of 600,000 units by the end of this year and further to 2 million units by the end of 2026. The automaker hopes to reserve the losses in the coming years as the volumes of EVs grow and hit an 8-per cent operating profit margin for the EV business by the end of 2026.
Ford will begin reporting results for each of its business units this year, instead of reporting key financial metrics by geographic region. The business units fall into three segments: gas and hybrid vehicles, commercial customers, and EVs and software.
Ford is projecting US$7 billion in operating profit for the gas and hybrid business and roughly US$6 billion for commercial business this year.
In 2021, Ford’s gas and hybrid business posted adjusted operating profits of US$3.3 billion, and the commercial business had adjusted operating profits of US$2.7 billion. Those results contributed to adjusted operating profits of US$10 billion for the year.
In 2022, the gas and hybrid business grew to US$6.6 billion in adjusted operating profits, while adjusted operating profits for the commercial vehicle business grew to US$3.2 billion. The adjusted operating profits for the year were US$10.4 billion.
