Ford announced this Thursday (23) the financial report for the last quarter with very important information: manufacturer to suffer US$3 billion loss in electric vehicle division. However, the reason for the loss is the result of long-term investments in the construction of new plants and the purchase of raw materials.

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Ford is investing in the electrification of its fleet, becoming the first electric pickup truck in the US market. In addition, the company is also betting on other vehicle models, such as the Transit electric van designed for business. The company divided its operations into two divisions: Ford Modelo and Ford Blue. While the Ford Blue division focuses on combustion engine vehicles, the Ford Modelo is all about electric vehicles.

Ford CFO John Lawler says the decision to split operations was basically the same as “rebuilding” Ford with an eye to the future. It’s not just about changing the way financial results are presented; we are changing the way we think, make decisions and manage the company, and allocate capital to achieve maximum return.” provide investors and shareholders with a higher degree of strategic clarity, growth and value.

Loss waiting to reap the rewards in the future

The Ford Model division has only made losses so far. It was $900 million in 2021, $2.1 billion in 2022, and $3 billion is expected in 2023. From the outside, it looks like the company’s investment is going wrong, but Lawler explains that investing in electric vehicles is a long-term process, so initial losses are expected before profits are made. “As everyone knows, electric vehicle startups lose money by investing in capacity, developing experience, increasing volume. [de vendas] and get a share [no mercado]”.

At the moment, Ford is investing in the construction of new plants and an increase in vehicle production. By 2023, the company wants to double Mustang Mach-E production to 210,000 a year and triple F-150 Lightning to 150,000 a year. In addition, the manufacturer is building a battery development center in Michigan and battery factories in Kentucky, Tennessee and Michigan. Despite the losses of recent years, Ford expects the model division to achieve a profit margin of at least 8% by 2026.

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Source: Ars Technika

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