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Ford’s EV business lost $2 billion in 2022, offset by big profits in fleet and legacy units

RickLightning

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KEY POINTS
  • Ford Motor said Thursday its electric vehicle business lost $2.1 billion in 2022 on an operating basis.
  • That loss was more than offset by $10 billion in operating profit between its internal combustion and fleet businesses.
  • The financials are the first detailed look at EV profitability as Ford unveils a new financial reporting structure.
https://www.cnbc.com/2023/03/23/ford-2022-unit-financials.html
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TaxmanHog

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Hopefully they avoid any tunnel vision and wasteful practices brought in from the legacy staff...

Before the restructuring was announced, some Wall Street analysts had urged Ford to spin off its EV business. But Farley and other executives argued that keeping the EV unit in house allows it to draw on the existing manufacturing expertise and other strengths now housed in Ford Blue and Ford Pro. This gives it a significant advantage over so-called “pure play” EV startup companies that have had to create manufacturing bases from scratch, they said.
 

metroshot

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Hopefully they avoid any tunnel vision and wasteful practices brought in from the legacy staff...
For the first so many years of a new "business", the tax deduction for losses is amazing and helps out the company overall ?
 

cwstnsko

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Every major auto manufacturer has a number of unprofitable models that are more than offset by the models that make a pile of $$$. Things shift around over time, but some version of the situation seems to hold true over time. Historically it’s more of a business decision to be a major player in the business by having a wide variety of offerings. Ford has , however, been deliberately shifting away from sedans in recent years, so they apparently think that segment is unlikely to be one that has much potential for profit for the next several years.
As a general rule, any brand new model or segment is likely to require investment for at least a few years before starting to generate returns. In my work, we always called it the hockey stick curve, you just hoped that the “handle” part of the curve was longer than the “blade” part of the curve :)
 

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WhiteBolt

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When a big company says they lost $2billion doesn't that just mean they only made $2billion profit instead of the $4billion they were hoping for?
 

COrocket

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When a big company says they lost $2billion doesn't that just mean they only made $2billion profit instead of the $4billion they were hoping for?
It means their expenses were $2 billion more than their revenue. A lot of this was probably spent on expanding and scaling their EV factories so you’d expect the margins to get better as Ford uses these factories to produce new cars in the future. It will be critical for Ford to ramp up production in order to start turning a profit with their EV division.
 

Henry Ford

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In 2022 Ford lost $2.1 billion on it's EV business. The same year it sold 61,575 EVs, which means Ford subsidized $34,104.75 per vehicle. Thanks, Ford!😃
 

TaxmanHog

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In 2022 Ford lost $2.1 billion on it's EV business. The same year it sold 61,575 EVs, which means Ford subsidized $34,104.75 per vehicle. Thanks, Ford!😃
Less dividends in the bank accounts of its shareholders.
 

shutterbug

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In 2022 Ford lost $2.1 billion on it's EV business. The same year it sold 61,575 EVs, which means Ford subsidized $34,104.75 per vehicle. Thanks, Ford!😃
So for comparison, Rivian lost $6.8B in 2022 while selling about 25K vehicles. How much is that per vehicle?
 

Henry Ford

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So for comparison, Rivian lost $6.8B in 2022 while selling about 25K vehicles. How much is that per vehicle?
Rivian delivered 20,332 vehicles in 2022. That works out to $334,448.16 per vehicle.😳 They should be pricing them like Rolls-Royces.
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