Ford Motor’s electric vehicle (EV) division has suffered losses of $3 billion ($4.1 billion CAD) before taxes over the past two years, owing to the company investing heavily in the new technology. The information comes as part of figures released on Thursday, March 23rd, in the company’s financial results.
The company has a new way of reporting its financial results where it separates its EV, profitable internal combustion, and commercial vehicle operations. Under its EV operation, Ford is expected to lose a similar amount of capital this year as well. According to the report, the EV unit is expected to be profitable by 2026.
Just like any new endeavour, Ford chief financial officer John Lawler said that the EV unit should be viewed as a startup. “As everyone knows, EV startups lose money while they invest in capability, develop knowledge, build (sales) volume and gain (market) share,” he said. The EV unit is currently working on second and third-generation electric vehicles and already offers three EVs for sale in the US: the Mustang Mach E SUV, the F-150 Lightning pickup, and an electric Transit commercial van.
Despite the losses, Ford has announced plans to build four new battery factories and a new vehicle assembly plant, as well as spending heavily on raw materials to build EVs. By the end of 2023, the company expects to produce 600,000 electric vehicles per year, increasing to 2 million per year by the end of 2026.
“After 120 years, we’ve essentially re-founded Ford,” said Lawler . “We’re embracing technology and competitive disruption in our industry, fundamentally changing how we’re thinking, how we’re making decisions, and how we’re running the company.”