Ford’s EV losses: $2 billion in 2022, $3 billion expected in 2023

Ford on Thursday reaffirmed 2023 full-year targets of $9 billion to $11 billion in EBIT and about $6 billion in adjusted free cash flow. It also said it remains confident in its projections that EBIT margins would be 8 percent for Model e and 10 percent companywide by late 2026.

Lawler, speaking to reporters, said near-term EV losses are to be expected.

“Ford Model e is an EV startup within Ford,” he said. “As everyone knows, EV startups lose money while they invest in capabilities, develop knowledge, build volume and gain share.”

The losses are expected to increase this year because of the money being spent to build manufacturing complexes in Tennessee and Kentucky and to offer alternative battery chemistry, he said.

Still, Lawler said Ford would be “approaching contribution margin breakeven” on EVs by the end of this year. The automaker expects to reach a production capacity of 600,000 EVs annually by the end of this year and be able to build 2 million a year by 2026.

To get to its 8 percent margins by the end of 2026, Lawler said the company will rely on a number of business operation improvements.

He said scaling volume will account for 20 points of margin; design and engineering will account for 15 points of margin; and vertically-integrating battery production will add another 10 points of margin. Additional business improvements will add another 3 points of margin, Lawler said.

He said he was confident the company could reach its targets in part because of recent hires like Doug Field and Alan Clarke, who previously worked at Tesla.

“It’s about the talent we have,” Lawler said. “We all know there is one profitable EV manufacturer. The folks that designed those vehicles are at Ford.”

Lawler said the Ford Pro unit is expected to nearly double its earnings this year as it prepares to launch a new Super Duty line of pickups and boost the output of its E-Transit van.

“Ford Blue and Ford Pro are both solidly profitable today and well-positioned for growth,” Lawler said.

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