Ford Motor Company released its first quarter financial report on Wednesday, and overall, its profits exceeded Wall Street's expectations. John Lawler, the Chief Financial Officer of the company, stated that Ford's performance in the first three months of this year was very stable.
The financial report shows that Ford's overall revenue in the first quarter increased by more than 3% year-on-year, reaching $42.78 billion; The net profit was 1.33 billion US dollars, a year-on-year decrease of 24%. The adjusted pre tax profit was $2.76 billion, a year-on-year decrease of 18%. The adjusted earnings per share were 49 cents, exceeding the previous analyst consensus of 42 cents.
Among them, Ford Motor's revenue was $39.89 billion, slightly lower than the analyst's expected $40.1 billion. Ford's traditional automotive business, Ford Blue, announced that its sales decreased by 11% to 626000 units, while revenue decreased by 13% to $21 billion. The electric vehicle sector continues to report losses.
Ford's electric vehicle division, Model e, announced on Wednesday that it sold 10000 cars in the first quarter, a year-on-year decrease of 20%, while revenue plummeted by 84% to $100 million. In the first quarter, the department's losses soared to $1.3 billion, equivalent to a loss of $132000 for every electric vehicle sold, significantly dragging down Ford's overall profitability.
Lawler pointed out that the continuous price war in the electric vehicle industry for a year and a half has made profitability a great challenge. Although Ford reduced costs by about $5000 on the Mustang Mach-E, the pace of revenue decline is far faster than the company's cost reduction.
As a reference, in 2023, Ford Model e reported sales of 116000 electric vehicles for the entire year, with a loss of $4.7 billion in pre tax profit and an average loss of $40525 per vehicle, only slightly higher than one-third of the first quarter loss.
Unprofitable electric vehicles
Despite concerns about Ford's electric vehicle business, CEO Jim Farley has stated that the business is being adjusted and the planned next generation of electric vehicles will help the electric vehicle division achieve profitability in the near future.
In addition, although the Model e is Ford's electric vehicle business unit, there are still some electric vehicles that are not sold through this department. The Ford Pro, which mainly supplies to enterprises and government customers, performs relatively better in electric vehicle sales.
Ford stated that its Pro division sees strong demand for electric vehicle sales, including 9250 E-Transit trucks ordered by the US Postal Service, 1000 F-150 Lightning pickups ordered by corporate customer Ecolab, and Ford Mustang Mach-E SUVs. Some of these orders will be delivered by the end of this year.
From an industry wide perspective, General Motors, which released its financial report on Tuesday, is clearly ahead of Ford. General Motors stated that its North American electric vehicle business is expected to achieve profitability in the second half of this year, while Stellantis stated that its European electric vehicle business has already started to make profits last year.
However, Ford stated in its latest outlook that it may control its electric vehicle business losses within the range of 5-5.5 billion US dollars this year, but it is difficult to provide clear guidance on its profit outlook.
Overall, Ford's weak performance is not only related to the overall sluggish environment of electric vehicles, but also affected by Ford's high warranty costs over the years. The company pointed out last year that due to production costs, quality issues, and operational efficiency, compared to traditional competitors, the company's annual losses reached 7-8 billion US dollars.