Ford announces 3 billion in losses in its electric vehicle business by 2023

The automotive company has accumulated losses of $6 billion in this branch over the last three years, although it expects to be profitable from 2024 onwards.

Ford announced that it anticipates losses of $3 billion in its electric vehicle (EV) business unit this year. The automaker estimated that the accumulated losses in the last three years, in this branch of the business, amount to 6 billion, however, it expects to be profitable by the end of next year.

The company, one of the big three in the U.S. automotive market - along with Chrysler and General Motors - is strongly committed to electric vehicles, and has invested billions in the sector. However, company sources indicated that they expect to achieve an 8% profit margin in this department from 2026 onwards.

Ford's estimates are that the Model e (electric vehicle) will accumulate losses of $6 billion between 2021 and 2023, including last year's $2.1 billion. However, the company expects its first generation of EVs, including the F150 Lightning and Mustang Mach E, to be profitable before taxes by the end of next year, Reuters reports.

The problem of rising electric vehicle prices

One of the main problems facing Ford is prices, which have skyrocketed as a result of the driver crisis and inflation. For example, its F150 Lightning electric pickup truck, one of the benchmarks, cost just over $39,000 in May 2021, but closed 2022 at $56,000. A hike that leaves the $7,500 federal electric vehicle tax credit offered under the Inflation Reduction Act last year by the Biden Administration with virtually no real consumer effect.

Ford engineers are working on new ways to reduce the cost of electric vehicle batteries. They are currently working on producing more components independently and testing new battery chemistries.

The automaker noted that counting all departments, in 2022 it achieved a slight increase in its pre-tax profit over 2021, slightly exceeding $10.4 billion.