The bean counters at Ford are finally learning to do the maths when it comes to the true cost of making and selling EVs.That’s because the company’s Model e all-electric unit reported first quarter losses that exceeded USD$1.3 billion on falling sales of just 10,000 vehicles in the US and Canada, which itself was down 20% from the same time last year.By comparison, it sold 626,000 gas powered cars in the same period..For the numerically challenged, that works out to a whopping $132,000 for each EV sold in the quarter. That’s more than triple the $40,525 it lost on each electric car and truck in the same quarter of last year.In a statement, Ford attributed the losses to price cutting — revenues were down about 84% to $100 million. Ford now expects full year losses in the division to surpass $5 billion.But analysts said the losses go far beyond the mere cost of building and selling those 10,000 cars and tracks. Instead, they include hundreds of millions of dollars being sunk into research and development..The company said it is its “intention” to have EV pricing cover the actual costs of building each EV, rather than covering all the research and development costs, within the next 12 months.Although it has managed to shave about $5,000 in production costs on each Mustang Mach E made, CFO John Lawler complained “revenue is dropping faster than we can take out the cost.”And Ford isn’t alone. On Tuesday, Tesla — the world’s largest EV maker — reported its adjusted first quarter earnings dropped 48% on 9% lower revenue, the first year-over-year drop in sales since the pandemic.
The bean counters at Ford are finally learning to do the maths when it comes to the true cost of making and selling EVs.That’s because the company’s Model e all-electric unit reported first quarter losses that exceeded USD$1.3 billion on falling sales of just 10,000 vehicles in the US and Canada, which itself was down 20% from the same time last year.By comparison, it sold 626,000 gas powered cars in the same period..For the numerically challenged, that works out to a whopping $132,000 for each EV sold in the quarter. That’s more than triple the $40,525 it lost on each electric car and truck in the same quarter of last year.In a statement, Ford attributed the losses to price cutting — revenues were down about 84% to $100 million. Ford now expects full year losses in the division to surpass $5 billion.But analysts said the losses go far beyond the mere cost of building and selling those 10,000 cars and tracks. Instead, they include hundreds of millions of dollars being sunk into research and development..The company said it is its “intention” to have EV pricing cover the actual costs of building each EV, rather than covering all the research and development costs, within the next 12 months.Although it has managed to shave about $5,000 in production costs on each Mustang Mach E made, CFO John Lawler complained “revenue is dropping faster than we can take out the cost.”And Ford isn’t alone. On Tuesday, Tesla — the world’s largest EV maker — reported its adjusted first quarter earnings dropped 48% on 9% lower revenue, the first year-over-year drop in sales since the pandemic.
