Ford Lost $100,000 On Every EV It Sold So Far This Year
Good morning! It’s Monday, May 13, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
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1st Gear: Ford Cuts Battery Orders As EV Loses Mount
It’s tough breaking into the electric vehicle game these days. Startups like Rivian and Lucid have posted massive losses while launching their lineups, General Motors has been slow to ramp up production of EVs and now Ford has shared some truly eye-watering losses from its own electric arm at the start of this year.
The blue oval reportedly lost more than $100,000 for every electric car it delivered in the first quarter of 2024, according to a report from Bloomberg. The sky-high loses forced the American automaker to rethink its EV targets and even cut battery orders for future models. As the site explains:
Ford Motor Co. has begun cutting orders from battery suppliers to stem growing electric-vehicle losses, according to people familiar with the matter, as it throttles back ambitions in a rapidly decelerating market for plug-in models.
The move is part a retrenchment of Ford’s EV strategy, which includes reducing spending by $12 billion on battery-powered models, delaying new EVs, cutting prices, and postponing and shrinking planned battery plants. Ford has forecast EV losses of up to $5.5 billion this year and Chief Executive Officer Jim Farley recently said its EV unit, Model e, “is the main drag on the whole company right now.”
The EV unit’s “drag” on the rest of the company is growing. In the first three months of 2024, Bloomberg reports that losses on every EV sold by Ford doubled to $100,000. In fact, the losses on EV sales are so great at Ford that Bloomberg predicts that over the course of this year they could wipe out all profits made by the Blue division, which is the company’s gas-powered car side.
Losses like this are staggering to see, and just go to show how important it is for EV production costs to start falling, quickly. Thankfully, Ford at least appears to be workin on this, with the company announcing earlier this year that it has an electric model in the pipeline that will be both affordable and profitable. Imagine that!
2nd Gear: Leaky Diesel Engines Spark Ford Truck Probe
Sky-high losses aren’t the only problem facing Ford right now, however. After the company was caught up in a probe over leaky fuel lines in certain Bronco Sport models last week, the National Highway Traffic Safety Administration has this week announced another investigation into the company, this time affecting diesel-powered F Series trucks.
NHTSA opened a preliminary investigation into more than 200,000 Ford trucks fitted with diesel engines, reports the Detroit Free Press. The investigation effects 2015 – 2021 model year Ford F-250, 350, 450, and 550 Super Duty vehicles fitted with the 6.7 liter diesel engine. As the Free Press explains:
The agency said a fracture in the secondary fuel filter in the vehicles could result in a fire, as the proximity of the filter to high heat sources creates a potential for auto-ignition thermal events and fires.
The NHTSA has contacted the filter’s maker, Allevard Sogefi USA, and said it learned the secondary fuel filter is tested to operate at reduced levels of pressure during the manufacturing process, compared with the possible maximum operating pressure in the fuel system of the vehicle.
A preliminary evaluation is the government agency’s first step in determining whether or not the diesel-powered trucks pose a safety risk to their drivers and other road users. If no such issues are found, the investigation could be closed without the NHTSA taking any further action, however if problems arise during the probe it could lead to a recall of the impacted models.
3rd Gear: Jaguar Land Rover Is Doing Just Fine
Despite facing all kinds of allegations about its cars being far too easy to steal, models getting a little long in the tooth and customers facing seriously high insurance premiums, people can’t stop buying cars from Jaguar Land Rover. In fact, last year was so good for the company that it just posted its best profits since 2015.
The Range Rover manufacturer sold more than 400,000 cars in 2023, which helped it generate a record $36 billion in revenue last year, reports British outlet Autocar. Sales mean that 2023 was the company’s most profitable year in almost a decade, as Autocar explains:
The firm generated £2.2 billion ($2.7bn) in profit from a record £29bn ($36bn) in revenues in the 12 months to 31 March 2024. The company’s operating margin was 9.2% – a full 2.7 percentage points higher than the previous financial year, which it attributes to increased sales volumes and reduced material costs – though it said this growth was partially offset by a ramp-up in marketing spend.
The company sold 401,303 cars in the full financial year, of which more than a quarter were Defenders. The two Range Rover models accounted for nearly 130,000 sales, too.
And the good times look set to continue for JLR, as Autocar reports that it still has a bulging order book to fulfill. Over the coming year, the company has more than 130,000 cars to deliver across its brands including Jaguar, Range Rover, Defender and Discovery. That order book is projected to swell even more when the hot new Defender Octa breaks cover later this year with more power and performance.
4th Gear: China’s Zeekr Is officially A 6 Billion Dollar Company
Another company that seems to be thriving right now is Chinese electric vehicle maker Zeekr, which launched an initial public offering this month that valued it at more than $6 billion.
The Chinese automaker, which doesn’t market any cars here in the U.S., saw its shares rise by more than 35 percent when it launched on the stock exchange last week, reports Reuters. The Geely-backed company was valued at $6.8 billion when sales opened, as Reuters explains:
The company successfully pulled off its U.S. flotation as it seeks to stand out among a crowded group of Chinese electric-vehicle makers competing for a bigger share of the European market.
“The capital markets in New York are very favorable for new energy vehicles. Zeekr is a global brand, and choosing to list in New York further demonstrates its global capabilities,” said CEO Conghui An, who is also the president of Zeekr’s parent company, Geely Holding Group.
Zeekr currently markets a lineup of three models in select markets around the world, including the 001 luxury shooting brake, the 009 MPV and the X SUV. It’s eyeing further global expansion in the coming months, but those plans could be dealt a serious blow this week as U.S. president Joe Biden is expected to unveil harsh tariffs on Chinese-made EVs in the coming days.
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On The Radio: Fleetwood Mac – ‘The Chain’
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