Ford, the electric car sinks the accounts
The electric car weighs on Ford’s accounts. Indeed, the American automaker plans to catch up losses of three billion dollars this year in the EV sector (electric vehicles), a value that would equal the losses accumulated in the division over the last two years (- 2.1 billion in 2022, – 0.9 billion in 2021). The growing losses are due to the huge increase in investments in new models and plants by the American company, which intends to spend 50 billion between now and 2026 to develop and build electric models, with the aim of producing 2 million cars a year before then.
Ford has nonetheless confirmed the goal of a operating margin of 8% on the EV sector for the end of 2026. “By the end of the year – said John Lawler, financial director of the company – the division will approach the breakeven point if research and development costs are excluded”.
The reaction of the analysts
Ford’s statement welcomed by analysts. Ford has unveiled a reorganization of its current segments that will affect financial reporting Intermonte – and with the demerger, the company is creating a new division that will house the electric vehicle business.” “The separation of the electric vehicle business will provide more transparency on this segment – explains the note again. – The reorganization highlights losses but also the still limited size of the business (2.3% of the total). The outlook outlines strong ambition from Ford, with a production capacity run rate seen at 600,000 units by the end of 2023, up from 96,000 units in 2022.
“However it concludes – Ford expects larger losses at -$3 billion in 2023. The scale effect will be visible by the end of 2024, when the EV industry will be profitable, while in 2026 Ford expects an Ebit margin of 8% with 2 million units sold. That outlook is ambitious, even though major EV player Tesla has sold 1.3 million units making a margin of 20% in 2022“.
Negative impact for a few more years
This negative impact of electric power on the balance sheets of car manufacturers will last for a few more years. The reports of Goldman Sachs e Morningstar draw a picture not without shadows: lo development of electric cars requires huge expenditures, to which must be added the cost of supplies of lithium batterieshigher now due to higher commodity prices, while the low production volumes do not currently allow for significant economies of scale. Only when the BEV market has reached a critical volume could the profit margins of this segment stabilize at levels above the current average for the auto sector.
Also according to an analysis of the Reuters which he took into consideration public data and projections released by companies, the world‘s major automakers are planning to spend nearly $1.2 trillion by 2030 for the development and production of millions of electric vehicles, together with the realization dbatteries, and with the relative extraction of raw material needed to support this production.
The incentive lifesaver rewards only the US
Faced with this shocking change from traditional to electric motors, there are those who have something extra. American car manufacturers (including of course Ford) may have the 369 billion monstrous package launched by Joe Biden. And the Old Continent? While in Brussels the de prufundis is in tune with petrol and diesel cars, no major European support plan for the sector is being studied.
The only reaction was the protest against Washington, accused of unfair competition. The main bone of contention is theincentive up to $7,500 granted to anyone buying a new electric car on condition that it and its components are mainly produced in North America. A defensive game, that of the EU Commission, which appears short-sighted and not very productive given the stubbornness in defending the ban on the sale of diesel and petrol cars from 2035.
Who earns with the green car
Virtually all automakers plan to catch up the profit in the Ev sector within two, five years. But in the meantime there are the current numbers. And to understand how heavy the impact of the electric car is, it is enough to look at the income of homes for each battery-powered car. In the ranking drawn up by the University of Duisburg, the leader is Tesla with approx 9 thousand euros clean by machine. The distance from the competitors is wide: the second in the standings, that is General Motors stops at just over 2.100 euro. Still in positive territory Toyota, Volkswagen and Hyundaiand the Chinese World with a net margin at just over 1,000 euros for an electric car. But there are those who work with zero margins or in the red and this is the case with the same Ford, Mercedes, Audi and BMW.
The top ten diesel and petrol cars have been completely reversed. The Ferrari and Porsche brands earn the most (the gap goes from 25,000 euros to 15). Followed by Audi (about 4,000 euros), BMW and Mercedes. Toyota puts around 1,800 euros in its pocket with Hyundai (just over 1,000) and another Korean brand, Kia. Nissan, Stellantis, Ford and General Motors close.