Ford lost $132,000 per EV sold in first Q 2024

[RickLightning]

That’s correct, but I still don’t get the “clickbait” response. Amazon lost money for quite a while while investing in r&d, logistics, and planning for the future. This post wasn’t meant as an attack on ford, but reading the replies, it’s becoming clear some may feel that way.

Clickbait is when a misleading headline is written to get you to click so they generate ad impressions for revenue. Has nothing to do with positive or negative story.

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[TaxmanHog]

It's not typical of ANY industry to have R&D that is expected to last multiple years, cover single year's production run. It would also be illegal. Investment is amortized over multiple years.

Amen said the tax guy...........................

 

[LightningShow]

I don’t understand why you feel it’s clickbait, it’s typical of virtually any industry to have the products sales cover the cost of development. But for the sake of my sanity, I’ll not try to convince you.

It's clickbait to call normal investment cycles "losing money". Incredibly stupid and disingenuous way to frame it.

 

[PreservedSwine]

It's not typical of ANY industry to have R&D that is expected to last multiple years, cover single year's production run. It would also be illegal. Investment is amortized over multiple years.

I don’t disagree, but that’s not what this article is about. It focuses mainly on their entire EV product line of which the F150 lightning is not a large portion. It seems to mainly focus on the electric cars. These are not single year RND trying to return to profitability in one year. They had suspected they would close the gap this year. That turned out to not be the case. I think that’s what makes it significant. As a Ford stock owner, currently down 35% from November 2021, I pay attention to these things. I believe I read GM has rounded the corner, and is Close to turning a profit on EV sales. I was hopeful, with many others, that Ford would do the same. Ford had expected lower the gap. They were able to lower the cost of each vehicle approximately $5000. But they had to discount the vehicles more than that to increase sales. It turned out to have a negative effect. This is isn’t a single year production run trying to pay for all the research and development, as some have alluded. Ford EV’s have been around for some years now. Eventually, investors are going to need to see progress. Yes, it will get amortized over many years. At some point, the revenue from sales has to pay for these investments.

 

[F150ROD]

Ford needs to figure out an MSRP and stick to it no matter what Tesla does. While Tesla will have the advantage people are souring on Tesla and their price games. Sure you buy at $38k but your car is now worth $24k. On top of that dealers won’t touch a Tesla for trade in. Several dealers have told me they are not taking Teslas for trade in.

 

[davehu]

it's so easy to forget it took Tesla 17 years before they turned a profit. Ford E won't take that long as the EV market has matured greatly since then but one shouldn't expect Ford E to show a profit for a number more years.

 

[shutterbug]

I don’t disagree, but that’s not what this article is about. It focuses mainly on their entire EV product line of which the F150 lightning is not a large portion. It seems to mainly focus on the electric cars. These are not single year RND trying to return to profitability in one year. They had suspected they would close the gap this year. That turned out to not be the case. I think that’s what makes it significant. As a Ford stock owner, currently down 35% from November 2021, I pay attention to these things. I believe I read GM has rounded the corner, and is Close to turning a profit on EV sales. I was hopeful, with many others, that Ford would do the same. Ford had expected lower the gap. They were able to lower the cost of each vehicle approximately $5000. But they had to discount the vehicles more than that to increase sales. It turned out to have a negative effect. This is isn’t a single year production run trying to pay for all the research and development, as some have alluded. Ford EV’s have been around for some years now. Eventually, investors are going to need to see progress. Yes, it will get amortized over many years. At some point, the revenue from sales has to pay for these investments.

The article is utter nonsense. It takes total expenses of creating an EV line and divides it by the number of vehicles sold during that short period (completely ignoring EV sold through fleet sales). That provides a number that means nothing. Ford has not provided the variable cost to build each EV. Had it done so, we would have something to talk about.

When Ford release MME, it had spend lots of money to bring it to market. But in 2021 it only released 3 cars. it would be idiotic to claim that the car was unprofitable at that point simply because you used 3 as the denominator in the profitability calculation. Cost accounting is very complex and people spend years trying to get it right. Having a an article published in a conservative magazine that is generally predisposed to pooh-pooh EVs is not a qualification in this discipline.

 

[PreservedSwine]

I’ve read many articles that state the electric vehicle competition has turned into a war, and there will be blood. Mainly from the actions of BYD and Neo, of which I’m excited about the cars, but not so much the subsidies

The article is utter nonsense. It takes total expenses of creating an EV line and divides it by the number of vehicles sold during that short period (completely ignoring EV sold through fleet sales). That provides a number that means nothing. Ford has not provided the variable cost to build each EV. Had it done so, we would have something to talk about.

When Ford release MME, it had spend lots of money to bring it to market. But in 2021 it only released 3 cars. it would be idiotic to claim that the car was unprofitable at that point simply because you used 3 as the denominator in the profitability calculation. Cost accounting is very complex and people spend years trying to get it right. Having a an article published in a conservative magazine that is generally predisposed to pooh-pooh EVs is not a qualification in this discipline.

No worries. It’s not just one article, it’s just the one I picked. There a plethora out there, but they all pretty much allude to the same points discussed during the earnings call.

 

[csukoh78]

Ford lost $1.3 billion in its electric vehicle department during the first quarter of 2024, which is about $132,000 per vehicle it sold.

Ouch. Lessens the feeling I paid too much for my vehicle

Sigh. No they didn't. Clickbait anti-EV title. All manufacturers lose thousand and thousands of dollars per vehicle if you factor in the initial outlay investment to produce those vehicles in the first place.

Without initial investment cost, Ford makes about $10,000 per electric vehicle.

 

[LightningShow]

it's so easy to forget it took Tesla 17 years before they turned a profit. Ford E won't take that long as the EV market has matured greatly since then but one shouldn't expect Ford E to show a profit for a number more years.

I guarantee they are making margin on the vehicles. These doom and gloom articles are all about applying the cost of long term investments to initial sales. I'm not reading the article but I seriously doubt they mentioned what the contribution margin is for the vehicles.

 

[rtshinn]

Exactly, McDonald's builds a new restaurant 1 million dollar investment in land and construction first Big Mac costs $999,995 dollars. I am tired of buggy whip companies telling me I made a bad choice. It cost me $4.00 a week to charge my truck VS $100.00 in gas. I love the northwest!.

This is the easiest to understand explanation for those who refuse to think about the costs of infrastructure, etc.

 

[Danface]

One World Trade Center cost $20 billion and has 173 tentants, thats $115,606,936 per tenant!

 

[brewski]

I lost track of what we were talking about...oh that's right, these trucks are great.

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