Ford postpones $12 billion investment in electric vehicle plans to balance demand and profit

Ford Suspends $12 Billion Investment into Electric Vehicle Plans to Achieve Balance between Demand and Profit

【PhoneAuto News】Ford’s electric vehicle shipments increased by 44% in the third quarter, and the revenue of Ford’s Model E division increased by 26% year-on-year, reaching $1.8 billion. However, Ford’s electric vehicle losses continued to increase in the third quarter. Ford’s operating loss for the quarter was $1.3 billion, higher than the $1.1 billion in the second quarter. The operating profit margin of the electric vehicle division decreased from -58.9% in the second quarter to -75.6%. Ford expects the division to lose $4.5 billion for the full year. Recently, PhoneAuto learned that there are reports that Ford loses about $36,000 for every electric vehicle sold this quarter. Buyers are unwilling to pay a higher price for electric vehicles compared to gasoline or hybrid vehicles, putting pressure on prices and profitability. In order to balance demand and profit, Ford has decided to postpone planned investments of about $12 billion.

Ford Motor Company stated that many consumers in North America are no longer willing to pay a higher price for electric vehicles compared to internal combustion or hybrid vehicles, making Ford’s ambitious plans to significantly increase electric vehicle production and high-cost plans more uncertain. Although sales of electric vehicles for Ford and the entire automotive industry are growing, the rate of growth has not reached Ford’s expectations. Ford executives emphasized that the company will not reduce spending on future electric vehicle models, but the pace of increasing electric vehicle manufacturing capacity and related investments will be slower than previous plans.

During the news conference on October 26th, Ford Motor Company’s CFO John Lawler made it clear, “We will not give up on second-generation electric vehicle products. However, we are studying the pace of capacity that we are implementing.”

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Lawler pointed out, “Consumers will determine the production volume. Ford is able to balance the production volume of gasoline, hybrid, and electric vehicles to match the pace of electric vehicle popularity, something that other companies cannot do.”

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