In Ford Motor Company’s Q3 earnings report, increasing losses in the electric vehicle (EV) segment were mainly due to reduced demand and a price competition initiated by Tesla earlier in the year.
Ford outperformed General Motors in Q3, selling 20,962 electric vehicles, with a significant boost from increased Mustang Mach-E production. Mach-E sales surged by 42.5 percent in Q3, with 14,824 units sold, of which 5,872 were sold in September.
While the company experienced a 44 percent growth in EV deliveries and a 26 percent year-over-year increase in revenue to $1.8 billion for the Ford Model e EV unit, the overall situation for Ford’s EV business wasn’t favorable. In the third quarter, EV losses continued to rise, resulting in an operating loss of $1.3 billion, which was higher than the $1.1 billion loss in the previous quarter and more than double the loss in Q3 2022.
This translates to Ford losing approximately $36,000 for each electric vehicle sold in the quarter, exceeding the estimated loss of $32,350 per EV in the second quarter. Ford anticipates a full-year loss of $4.5 billion for its EV unit in the entire year. Why is this happening?
Ford attributed the Q3 loss to “continued investment in next-generation EVs and challenging market dynamics.” Regarding the latter, the company noted that “many North American customers interested in buying EVs are unwilling to pay premiums for them over gas or hybrid vehicles.” This has created pressure on EV prices and their overall profitability, according to Ford.