Shulou(Shulou.com)11/24 Report--

CTOnews.com May 8 news, Ford Motor Company recently released the first quarter of 2023 results. Ford Model e, the company's electric vehicles and digital business, lost $700m (excluding interest and taxes) in the quarter, while only 12000 electric vehicles were sold, an average loss of $58000 each (CTOnews.com Note: about 401000 yuan), according to the results. Meanwhile, electric car sales generated only $700 million in revenue, compared with $1.6 billion in the fourth quarter of 2022. By contrast, the company's internal combustion engine and commercial vehicle divisions, Ford Blue and Ford Pro, are profitable, generating steady revenue for the company.

This is the first time Ford has reported results according to its new business unit. Ford Model e is responsible for electric vehicles and digital operations, Ford Blue is responsible for the production of internal combustion engine vehicles, and Ford Pro is responsible for commercial trucks and trucks. This division was carried out in early 2022 to adapt to changes in the automotive industry and improve the competitiveness of the company.

Ford Model e lost money for several reasons. First, sales of Mustang Mach-E electric vehicles produced by the plant fell as production at the Cuatilan plant in Mexico ground to a halt. The pause is aimed at increasing the plant's capacity, which is planned to reach 210000 vehicles a year by the end of 2023. Second, Ford Model e is investing more to expand the production of electric vehicles. That includes spending $3.5 billion at Ford's own LFP battery plant in Marshall, Michigan, and BlueOval City, Tennessee, which will produce Ford's next-generation electric trucks with an annual capacity of 500000 by 2025. In addition, Ford Model e also faces fierce competition in the market. Competitors such as Tesla continue to lower prices, forcing Ford to lower the price of the Mustang Mach-E.

Ford Blue and Ford Pro, by contrast, did well. Ford Blue made a pre-tax profit of $2.6 billion in the first quarter and an operating margin of 10.4%. The biggest contributor is the Fmur150 pickup truck, while Ford maintains its position as the leading truck maker in the United States, producing one every 30 seconds. Although the cost of new products and inflationary pressures have affected profits, Ford Blue and Ford Pro still helped the company achieve a net profit margin of 4.2 per cent-the highest level in more than a year.

Although it is shocking to lose nearly $60, 000 on every electric car sold, there is no need to worry too much. Unlike other carmakers, instead of abandoning internal combustion engines, Ford relied on its internal combustion engine and commercial vehicle businesses to provide a buffer for the electric vehicle business. Although Tesla's Model Y price cut has had an impact on Ford's profits, electric vehicle sales are likely to increase in the second quarter, reducing the average loss.

Ford's foray into the electric vehicle market is a long-term strategy, and the company expects operating losses in its electric vehicle business to reach $3 billion in 2023-more than $2.1 billion in 2022. But with the introduction of new models, improved production facilities and increased production capacity in the coming years, investors will keep a close eye on Ford's performance. In fact, The Motley Fool, a financial and investment consultancy, thinks now might be a good time to invest in Ford. They point out that while the electric car business will take several years to grow, it could bode well if investors see higher profit margins in the coming quarters.

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