Caixin News Agency, July 25th: For multinational car manufacturers, the transition from gasoline to electric vehicles may take longer than expected.
On July 24th Eastern Time, Ford Motor Company released its financial data for the second quarter of this year. During the period, the company's revenue was 47.8 billion US dollars, a year-on-year increase of 6.2%; Adjusted EBIT was $2.8 billion, a year-on-year decrease of 26.3%, and analysts expect a year-on-year decrease of 1.8% to $3.73 billion; Adjusted earnings per share (EPS) were $0.47, a year-on-year decrease of 34.7%.
According to the financial report, Ford Motor's overall revenue in the second quarter exceeded expectations, increasing instead of decreasing, thanks to the significant growth of its traditional automotive business Ford Blue exceeding expectations, while its electric vehicle business continued to suffer losses. Specifically, the revenue of the company's electric vehicle division, Ford Model e, decreased by 37% year-on-year to $1.1 billion; Responsible for Ford's gasoline and hybrid vehicle business unit, Ford Blue, with revenue of $26.7 billion; The revenue of the commercial division Ford Pro was $17 billion, an increase of 7% and 9% respectively.
Due to ongoing pricing pressure and investment in the next generation of electric vehicles, the Ford Model e division is expected to incur a loss of $5 billion to $5.5 billion in 2024. Ford stated that the electric vehicle business suffered a pre tax loss of $1.1 billion in the second quarter, as the first generation of electric vehicles faced industry wide pricing pressure and lower wholesale prices. Just two days ago, Ford Motor admitted that its previously set European electric vehicle development goals were too aggressive and would abandon the goal of achieving full electrification of European models by 2030.
At that time, Marin Gjaja, Chief Operating Officer of Ford's Model e Electrification Division, stated that consumer demand for electric vehicles had not met expectations, and therefore Ford would reassess its electric vehicle strategy in Europe. The high cost of batteries has made consumers hesitant, and Ford will continue to operate its internal combustion engine business and invest resources in hybrid models. Although Ford has not yet adjusted its electric vehicle plans in the United States, only a week ago the company announced that it will expand production of Super Duty pickup trucks in Canada, including hybrid models, instead of the electric Explorer and Lincoln Aviator originally planned to be produced at the factory. Ford CEO Jim Farley once admitted that compared to electric vehicles with high production costs and difficult to sell, Super Duty pickups are profitable and in high demand, making it easy to sell all vehicles produced.
General Motors is also uncertain about the sales prospects of electric vehicles. According to the financial report, the delivery volume of General Motors' electric vehicles in the second quarter increased by 40% year-on-year, reaching 21930 units, accounting for 3.2% of the total sales in the United States. General Motors expects that once it reaches a production of 200000 vehicles by the fourth quarter, its electric vehicles will achieve profitability based on production or marginal contributions. However, the company is also slowing down its electric vehicle strategy.
On July 15th, Mary Barra, CEO of General Motors, stated that due to the slowdown in demand for electric vehicles, the company will not be able to achieve its goal of producing one million electric vehicles by the end of 2025. Future plans for electric vehicles will be flexibly adjusted based on demand. Subsequently, General Motors announced the postponement of its electric vehicle production line at the Orion assembly plant in Detroit and the launch of a Buick plug-in hybrid model due to insufficient demand.
The company has postponed the opening of the Orion assembly plant to mid-2026, "Barra revealed. The plant plans to produce the new Chevrolet Silverado EV, which was originally scheduled to start production by the end of 2024, but this goal was postponed until the end of 2025 at the end of last year.
Not only the two major American car brands, but also several European car companies including Porsche have recently begun to adjust their previously formulated plans for electric vehicle transformation. On July 22nd, due to lower than expected sales of plug-in electric vehicles in markets such as Europe, Porsche announced that it will abandon its previously set target of electric vehicle sales accounting for 80% of new car sales by 2030. Although multiple highly anticipated electric vehicle models will be launched in the coming years, the pace of transition to electric vehicles is slower than expected, and this goal is too aggressive
On the same day, Audi announced that it will expand and upgrade its hybrid product line in the coming years, while retaining a dual line layout of fuel and electric vehicles in major vehicle segments. Audi CEO Gernot Dllner acknowledges that the importance of plug-in hybrid models is higher than initially expected, and the transition from gasoline to electric vehicles takes longer than expected.
The delay of the originally aggressive development goals of electric vehicles by European and American car companies is a process of shifting from a blind slogan stage to a rational determination of strategic goals. In the eyes of industry insiders, the slowdown in the pace of global automotive electrification is due to many factors: on the one hand, the fuel vehicles of European and American car companies are currently in the monetization stage with years of accumulated experience and brand advantages, while the electric vehicle industry is generally in the investment stage, and the huge gap in related businesses makes it difficult for everyone to cope; On the other hand, in the early stages of the development of the electric vehicle industry, it is necessary for the government to provide assistance in the construction of charging and energy replenishment facilities through subsidies and other forms, in order to achieve a "cold start" of the industry. However, due to various factors, it is difficult for European and American governments to invest more public resources into the electric vehicle field. In addition, the rapid development of China's electric vehicle industry has greatly intensified the concerns of European and American car companies about the future evolution of the global automotive power structure.