Ford shareholders ask what the heck is going on with EVs
Ford CEO Jim Farley and company executive chair Bill Ford fielded questions from shareholders on Thursday about the viability of electric vehicles and concerns about the billions of dollars in losses being reported quarter after quarter.
Most recently, Ford’s first-quarter earnings report in April included news of $1.3 billion in losses within its Model e division. Farley said at the time that the electric vehicle unit was “a huge drag” on the bottom line but also indicated “tremendous progress” in cutting losses and growing market share with new consumers. Overall adjusted earnings for the quarter before interest and taxes totaled $2.8 billion.
“We remain excited about EVs, which offer incredible value, performance and convenience for many of our customers,” Bill Ford said at Thursday’s annual virtual shareholder meeting.
“We have a very good balance of propulsion across our lineup,” Ford said. “We’re America’s No. 1 brand for gas vehicles, No. 2 for EVs and No. 3 for hybrids. In the U.S., the No. 1 gas, hybrid and electric trucks were all produced by Ford.”
‘We are absolutely crushing it’
Ford’s international operations are now profitable after years of reporting losses. And Ford Pro, the business-to-business arm of the company that sells vehicles and software subscriptions, is a nearly $60 billion company within the automaker. It’s all helping to offset costs of EV production and development. And costs in EVs are projected to fall with new products, Ford executives said.
Despite last fall’s UAW strike, Ford remains on plan and continues to return profits to investors, Ford said. He delivered prepared statements and also responded directly to callers, as is custom during the hourlong meeting.
Farley said he is committed to growing the value of the automaker. His decision to split the company into three units offers more transparency and spotlights strengths and weaknesses, he said, citing revenue and growth increases. Farley noted that Ford is anticipating that earnings before interest and taxes could reach $12 billion in 2024, a record for the 120-year-old automaker.
“We are absolutely crushing it,” Farley said.
Ford is benefiting from the huge demand for work trucks and national infrastructure projects, he said.
Hybrid sales rise amid EV adjustments
“The road to consumer adoption for EVs, and, eventually, profitable EV business, for sure is a bumpy one for our whole industry, including Ford,” Farley said. “But we remain nimble and continue to recalibrate our EV strategy in an increasingly dynamic and global marketplace, adapting and evolving our spending and investments to right-size our capacity, balance growth and profitability and compliance to optimize the total Ford enterprise. Affordability matters for the early majority of EV adopters.”
A pricing premium that existed early “proved to be untenable” and didn’t really reflect the majority of customers and their willingness to pay, Farley said. “Customers want choice as they move toward full electric …”
Ford is working to making new EVs more affordable and more profitable, but for now Ford is focusing on geographies and segments where the company dominates.
Hybrid vehicles are “especially important to bridge customers to adopting pure EV,” Farley said. “Ford has been investing in hybrid technology for more than 20 years, and it’s really starting to pay off. Hybrid sales in first quarter were up 36% and we’re on pace to expand this business 40% this year — and it’s led by Maverick.”
More:Teen Mustang owner fighting cancer likens racetrack experience to Taylor Swift concert
More:They’re some of the women behind Ford’s Ranger, F-150 launches
The best vehicles at the lowest costs will win the EV war, Farley said. The automaker is focused on recruiting the best EV and software engineers in the world to challenge not just Tesla but fast-growing Chinese automakers moving into the EV segment globally.
“I am so excited about the future we’re building together,” he said.
Contact Phoebe Wall Howard: 313-618-1034 or phoward@freepress.com. Follow her on X, formerly known as Twitter @phoebesaid. Read more on Ford and sign up for our autos newsletter.
