November 1, 2023: Auto giant Ford is facing up to the “truth bomb” that motorists don’t want to pay a premium for EVs after posting a third-quarter operating loss of $1.3 billion in its EV division, according to industry commentator Robert Bryce.
The figure equates to a loss of more than $62,000 for each of the 20,962 EVs Ford sold during the period, says Bryce (pictured).
The third-quarter loss on the EV business, combined with a $1.1 billion second-quarter EV loss and a first-quarter EV loss of $722 million, means that Ford has already lost about $3.1 billion in total on its EV business this year.
Ford acknowledged in a statement that “many North America customers interested in buying EVs are unwilling to pay premiums for them over gas or hybrid vehicles, sharply compressing EV prices and profitability”.
Bryce, who also hosts the Power Hungry Podcast, says: “That’s a truth bomb of the first order.”
However, other auto firms are also reporting heavy losses on EVs or announcing cutbacks in their EV expansion plans, according to Bryce.
On October 18, Tesla CEO Elon Musk said he was concerned about the impact of high interest rates on car buyers and said the firm was hesitating on its plans for a factory in Mexico as it assesses the economic outlook.
You know the EV business is in trouble when Musk makes such comments, Bryce says.
“These moves show that the universe of likely EV buyers is far smaller than the automakers expected. That miscalculation will cost the companies, their shareholders — and taxpayers — tens of billions of dollars in wasted capital.”
Bryce’s analysis is online.