(UnitedVoice.com) – Over the past few years, there’s been a noticeable increase in the number of electric vehicles (EVs) for sale. Manufacturers were developing cars and trucks to keep up with consumer demand. However, the shift that once seemed inevitable has plateaued, even as the Biden Administration tries to push them in its clean energy agenda. Ford, which developed the Model E, has reported stunning losses for the first quarter of 2024.
According to its statements, Ford sold 10,000 electric vehicles but lost approximately $132,000 on each one. That equates to a $1.3 billion loss in its first quarter, a 20% decrease in its net income. The automaker explains that it costs a significant amount of money to carry out the research that goes into developing its EVs.
Ford is not pushing that cost onto the consumer, only the amount actually goes into building the vehicles. It will be years before the company recoups the cost of its research. Overall, it expects to lose close to $5 billion in 2024 alone. CFO John Lawler said there has been a price war among EV manufacturers, which has also hindered profitability. He said, “Revenue is dropping faster than [the company] can take out the cost.” In one example, Ford lowered the cost of its Mustang Mach-E by $5,000.
Despite these losses, the company says there’s a strong demand for EVs in its fleet sales, which caters to government and business buyers. One of its orders is from the US Postal Service, which purchased 9,250 E-Transit vans. Ford plans to deliver those by year-end.
There are also plans to increase the profitability of the EV division, per CEO Jim Farley. The company plans to make changes that will allow it to show a profit on its next generation of electric vehicles.
Tesla is also feeling the pressure, having seen its revenue fall by 9% in the same period and its adjusted earnings decrease by a stunning 48% in the first three months of 2024.
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