Ford Motor declared its Q2 earnings post after the market close on Thursday, by stating, “EV adoption will be a little slower than expected.” The automaker is pushing back its 600,000 EV run rate ambition until next year.
Ford’s second-quarter earnings preview
The company lost $2.1 billion last year, and operating losses raised to $722. This doubles YOY at Ford’s Model e EV business in the first quarter of the year. Ford’s model e unit produced $700M in revenue, down 27% with respect to the previous year with the drastic decline in the operating margin.
EV sales fall in the second quarter after Ford deal with downtime at its Mexico plant, where the Mustang Mach-E is produced. This results in Mach-E sales got down by 20% YTD. On the other hand, sales of Ford’s electric truck raise more than doubled to 4,466 in Q2.
The American automaker cut down the F-150 Lightning prices before this month. The trim-down amount is nearly $10,000 which could certainly impact the margins.
Ford has already revealed that it predicts a full-year loss of $3 billion for its Model e business. While it is interesting to see how Ford going to adjust it. In the interim, competitor General Motors beat Q2 expectations. They also issued guidance for the second this year, and the same plays an important role.
Ford Q2 2023 EV earnings and financial results
Ford Model e informed revenue of $1.8 billion in Q2 2023, which is more than double with respect to last year. Although, operating losses touches an enormous $1.08 billion, operating margins were -58.9%.
Moving ahead, the automaker is now forecasting a loss of around $4.5B with respect to its Model e unit for 2023. This is in regard to evolving factors like increases in pricing, new investments, and other associated costs.
Ford’s CEO Jim Farley said, “The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford.”
Farley added, “The shift to powerful digital experiences and breakthrough EVs is underway and going to be volatile, so being able to guide customers through and adapt to the pace of adoption are big advantages for us.”
Considering this, Ford is stepping ahead with its 600,000 annual EV production goal to 2024. This declared figure is estimated to be achieved by the end of the year. And mentioned that it will maintain flexibility, balancing growth and profitability, in order to accomplish a two million run rate.
The automaker said it had completed the capacity expansion for the Mustang Mach-E, suggesting we should see sales start to pick back up into the second half of the year. In addition to this, the automaker stated that it had attained the capacity expansion for the Mustang Mach-E.
Ford also revealed that LFP batteries are now offered in the Mustang Mach-E, alongside debut in the Lightning in 2024, which enables lower costs. Impressively, the automaker will be the first OEM with an LFP plant in North America.
In aggregate, Ford generates its company-wide guidance for the year as it expects adjusted EBIT between $11 billion and $12 billion. Additionally, adjusted free cash flow is between $6.5 billion and $7 billion.
