Ford expects $9 billion to $11 billion in 2023, electric vehicle investments
Ford expects to report profits of $9 billion to $11 billion in the year 2023 on the strength of its conventional vehicle and commercial operations, while posting a huge loss on its Model e electric vehicle division.
The automaker expects to lose $3 billion because of investments geared to increase production of electric vehicles to an annual rate of 600,000 by the end of 2023 and two million in 2026. CFO John Lawler told reporters ahead of a 10 a.m. EV startup, Ford Model e is an EV startup within Ford. The ET call with investors was reported by Automotive News.
The automaker is also competing against aggressive EV moves by Tesla and GM.
As everyone knows, EV startups lose money while they invest in capabilities, develop knowledge, build volume and gain share. Model e lost $2.1 billion in 2022, and its loss in 2021 through 2023 is projected to be $6 billion.
The Ford Blue division, which is focused on internal combustion engine and hybrid vehicles, is projected to earn $7 billion this year, a rise from $6.8 in 2022, while the Ford Pro commercial services division is targeting double its growth from $3.2 billion to $6 billion.
Ford Blue and Ford Pro are both solidly profitable and well-positioned for growth, and that its margin target for overall operations is 10% in 2026, with Model e at 8%.
In early March, Ford said it was boosting production of six key models as supply chain issues eased up, including the Maverick compact pickup, Bronco Sport SUV, Transit vans, along with the electric Mustang Mach-E and F-150 Lightning.
Ford unveiled an all-electric Explorer SUV that will be built in Germany for European sales starting this year, using technology developed by Volkswagen.
This was the first time Ford broke out financial results by division rather than region, which is how it will continue moving forward, because that's how we run the company now, Lawler said. Ford shares have gained little this year, compared to a 2% gain for the S&P 500.