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Ford is delay about $ 12 billion in contrive investment on EVs , include construction of a second battery plant with joint venture partner SK Ondue to buffer demand for higher priced premium electric vehicles .
CFO John Lawler accentuate Thursday during the troupe ’s third - fourth part earnings call that the company was n’t backing by from its next - generation electron volt vehicles . However , he along with CEO Jim Farley acknowledged that while EV sale have grow , consumers are n’t willing to pay a premium for an EV over a gas pedal or hybrid fomite . That price pressure has squeeze net income , and in the case of Ford ’s EV business stimulate loss to farm .
While , overall , Ford is still wildly profitable , those earnings are arrive from its commercial intersection and services business known as Ford Pro and sales of its iconic gas and hybrid vehicles , which falls under its Ford Blue unit .
The fellowship ’s Model e unit of measurement — the business dedicate to EVs — is another account . Ford reported a $ 1.3 billion loss in the third fourth on its Model e unit of measurement up from the$1.08 billion lost in the former quarter . Ford finally hope to make an 8 % allowance on EVs with a cost structure that reflects price space-reflection symmetry with ICE vehicles . To get there , Ford will need to make structural changes .
Farley say reducing the sticker monetary value on electric vehicles is a top antecedence in ordering to keep up with the “ be active mark ” that is the EV market . For Ford , that means cutting functional costs and scale quickly in an attempt to set ashore on the sweet spot that Tesla has nailed .
“ Tesla in reality gave us a huge gift with the laser focussing on cost and scaling the Model Y , ” Farley enjoin Thursday during the company ’s third - tail earnings call . “ They set up the criterion and we are now making real progress on our 2d and third cycle eV that are in the thick of being develop today . ”
That “ existent advance ” has n’t translated into a profitable EV business yet .
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Ford ’s answer , which Farley emphasized on the troupe ’s remuneration call , was on price , not more features . Ford is likely already assign this price strategy into action . In October , Ford introduced theF-150 Lightning Flash getaway , a cheaper , tech - lumbering version of the F-150 Lightning . Ford also said it ’s project to insert a few second and third - generation vehicles , including a new full - sized pickup truck , that will come in at blue price point .
“ Great intersection is not enough in the EV clientele any longer , ” suppose Farley . “ We have to be whole competitive on toll . ”
Lawler said the carmaker ’s next - gen EVs will repulse the “ ultimate success of our EV conversion ” because they ’ll be cost - optimized and “ guided by the eruditeness of our first - multiplication vehicle that are presently in the market . ”
In the meantime , Ford is shift output and adjust succeeding capacity to “ better match market need . ” The automaker has taken out some Mustang Mach tocopherol output and has slowed down several investments , including working with Korean battery Jehovah SK On to delay a secondBlue Oval SKjoint speculation battery works in Kentucky . Ford has also said it will evaluate its global Battery Park Michigan plant for potential allowance .
“ All tell , we have pushed about $ 12 billion of EV spend , which includes capex , lineal investiture and disbursement , ” read Lawler , remark that Ford wo n’t “ really go ahead and draw in the induction on it if we do n’t need to . ”
Ford pulls guidance pending UAW deal
Ford and United Auto Workers union treater reached atentative agreementWednesday to end what has become a six - week strike . Ford said the strike had an EBIT impact of about $ 100 million in the third quarter and has shave about 80,000 building block from the automaker ’s programme .
“ This would boil down 2023 Eb by roughly $ 1.3 billion , ” said Lawler , noting that Ford will allow update on its full - class steering once the agreement is sign .
Ford’sprevious guidancefor 2023 was between $ 11 billion and $ 12 billion in adjust earnings . The automaker also expected free cash flow of between $ 6.5 billion and $ 7 billion . Through the third quarter , Ford clear $ 9.4 billion in adjust EBIT .
The accord pay the union 25 % pay increment over the next four and a half years , include an initial increase of 11 % . Cost of living adjustments see a raise of top wages to more than $ 40 per minute and an increase of 68 % for start wages to over $ 28 per hour .
Ford Q3 2023 financials
Ford reported a last income in the third quarter of $ 1.2 billion , compared to an $ 827 million loss in the class prior .
Collective self-propelled taxation was $ 41.19 billion , versus $ 41.22 billion expected by Wall Street .
Ford ’s ICE business operations , Ford Blue , realise $ 1.72 billion in the quarter , while the Ford Pro commercial-grade business bring in $ 1.65 billion . Again , Model e lost $ 1.3 billion in the third quarter .
The automaker closed out the quarter with cash flow rate from operations of $ 4.6 billion and adjusted innocent John Cash flow rate of $ 1.2 billion .
Ford said it has more than $ 29 billion in hard cash and $ 51 billion in liquidity as of September 30 .
