Ford loses $1.2 billion on EVs in Q3

Ford Motor Company reported some ugly, but unsurprising, news from its third-quarter earnings report: the company lost $1.2 billion on its electric vehicle business. It turns out that simply making more EVs — without considering what consumers want to buy — is a losing strategy for a business that needs to sell cars.  

Robert Bryce makes the math explicit in a recent Substack post:

This afternoon, the company reported that it lost $1.224 billion in its EV business during the third quarter. In early October, the company reported EV sales “were up 14.8 percent on best-ever sales of 20,962 vehicles.” Thus, simple division shows that the storied automaker lost $58,391 for each EV it sold during the quarter.

The company’s losses on its EV business, known as Model e, for the first nine months of 2024 total $3.7 billion. For reference, that $3.7 billion loss is equal to the gross profit (Ford calls it EBIT, short for earnings before interest and taxes) it made on Ford Blue, the division that makes internal combustion vehicles.

The company had killed a three-row, all-electric SUV project just months ago. The WSJ reported:

Ford said it eliminated about $500 million of EV-related costs in the third quarter compared with a year earlier, but that was offset by weaker pricing on its battery powered cars. Ford Chief Executive Jim Farley has said that whittling down EV losses—on track for more than $5 billion this year—is a top priority for the company.

Consumers are faltering on EV adoption. The JD Power EV Index this summer showed a first-ever drop in the number of shoppers considering an EV for a new purchase. Only about 44% of consumers in an April 2024 Gallup poll were “seriously considering or might consider buying an EV.” It seems increasingly likely that EV sales to affluent early adopters have largely concluded, and now the challenge is to appeal to mainstream consumers, who simply don’t like them for many reasons including driving range, charging difficulties, higher insurance premiums, and exorbitant repair costs.

It’s better late than never that Ford is recognizing the unpopularity of EVs, but it might’ve been nice to do so before losing billions of dollars.