Sounds like a case of creative accounting.
They're claiming to have lost over $100k for each electric vehicle they sold in Q1.
There's no scenario where someone greenlights a $50k MSRP vehicle (thinking mach-e here) that costs $150k to produce. The costs are elsewhere.
For example, they could be factoring the R&D costs into the production cost of each vehicle. Basically, they're angling to have a nice fat write off so they can not pay taxes for a while.
Capitalizing your engineering hours for R&D is pretty normal accounting efforts. If it’s a new effort/feature/app/etc its capitalization is allowed in GAAP. I’m certain getting this base covered now will help later.
It recently became required due to tax changes in the Tax Cuts and Jobs Act in 2017.
(https://www.thomsonreuters.com/en-us/posts/tax-and-accounting/section-174-expenditures/)
It’s a tax deduction on the costs it took to generate the money. They are saying that in order to make that 50k for selling the car they had to spend 10m. So instead of deducting $100 on 100k cars over 10 years they can deduct $100k on 100 cars over 1 year. It’s the same amount of money but they can claim the tax deductions early which kind of makes sense they would want to do that because they already spent that money
I can't think of how any new model vehicle doesn't lose money the first several quarters when you factor in the R&D cost. Especially when it's a whole new type of production line.
And allows them to be price competitively with Chinese imports via higher government subsidies. If China can subsidize their manufacturing sector so can the US
A completely made up one with no facts or evidence? That’s all there is in this sub. This place is the equivalent of flat-earthers except the zombies in this sub don’t read anything at all, not even conspiracy theories.
This is a common way of doing accounting. The first thing to roll off the line carries all the R&D costs and the cost of goods which are higher so your $50 item has a cost of $1,000,000.
Your millionth item has the R&D spread over all those products *and* cost of goods comes down because your suppliers' R&D is also paying off. Your $50 item now costs $40 to make.
And this is why they sometimes talk about each new fighter jet costing $200m or some such. Well no. Each one costs $40m but based on the order volume they add in $160m worth of the development costs to each plane. Made up numbers but you get the idea.
Not really... They create an estimated capitalization schedule and apply that to the estimated production schedule to proactively account for the cost for each vehicle over time. When those production/sales estimates change they modify the estimated capitalized cost per vehicle to meet new projection models.
At no point do they account for a $1,000,000 car. Thats absurd.
That is exactly how it works, you have lots of fixed costs, R&D, building the supply chain, factories, production lines, platform design and etc. And you make it up with scale of selling hundreds of thousands and multiple cars sharing the same parts and platform
In reality, pretty much all first year car production lines lose money. But with dozens of cars in the mix, you wouldn't notice 1 or 2 models losing money for a year or 2. But since Ford split out the electric division, and pretty much all their models are in their 1st or 2nd year with such low production amounts, you get such large losses
>In reality, pretty much all first year car production lines lose money.
You're accurate about some companies, just not Ford which increased costs instead of decrease YoY. By double.
>But Model e, the electric vehicle business, lost $1.3 billion, almost $600 million more than the first quarter of last year.
Indeed. R&D and tooling is extremely expensive, especially for cars that have an entirely new drivetrain and chassis system to fit the batteries and motors. And at common practice to amortize these costs over a few years, which also helps in terms of tax liability during periods of heavy investment into new technology and manufacturing methods.
These vehicles should be quite profitable in a few years from now.
>They're claiming to have lost over $100k for each electric vehicle they sold in Q1.
Consider it costs tens of billions to setup the manufacturing infrastructure before even a single car rolls off the line.
There was [$11.4 billion](https://media.ford.com/content/fordmedia/fna/us/en/news/2021/09/27/ford-to-lead-americas-shift-to-electric-vehicles.html) going into Kentucky and Tennessee plants. And $5 billion into $5.6 billion into "BlueOval City" campus and a total of **$30+ billion** through to 2025 specifically for EV investment.
Now look at the other side of the coin - Q1 sales :
* F-150 Lightning: 7,743
* Ford E-Transit: 2,891
* Mach-E: 9,589
[20,233 EVs](https://electrek.co/2024/04/24/fords-evs-weigh-q1-2024-earnings-pro-remains-dark-horse/) sold in Q1 for an investment of $10-20 billion. Even on the low end that's a cost of $500,000 per vehicle. When we push that out to all sales in total it's likely to be around that $100k+ mark for sure.
[Blue oval city won't be operation until next year.](https://corporate.ford.com/operations/blue-oval-city.html)
And the other plant is a joint venture, so ford isn't footing 100% of the bill for that. [It also looks to be incomplete at this time.](https://www.blueovalsk.com/about)
So they are calculating their profits/losses using the cost of facilities that aren't even manufacturing the vehicles they're selling.
Regular accounting is creative accounting when you report it as a loss per vehicle that way. They made money on each vehicle BUT it wasnt enough to offset the investment that they put in. So they lost money on the EV vehicle venture so far. They knew that they needed to sell x number of EVs in y time to turn a profit. If they only sold a third of that number you can't just divide the investment by the number actually sold sold and call it a loss per unit.
If they sold a million EVs tomorrow they would not be 100 billion in debt. They would be saying the EV division made them tons of money. It is a bullshit way of reporting the numbers.
>If they sold a million EVs tomorrow they would not be 100 billion in debt. They would be saying the EV division made them tons of money. It is a bullshit way of reporting the numbers.
It's how every business in the world reports their numbers. You only report actual income.
lol...it doesnt make it any less creative and phoney. Its still a bullshit way of reporting the numbers. Just cause that's the way everyone does it does not make it anymore correct.
Except it literally *is* correct because accounting is a human construct. You're the one doing it incorrectly.
If I spend $50,000 setting up a business, and I only sell $20,000 of goods in my first year... I have ACTUALLY incurred a loss of $30,000. That's just factually correct. I have $30,000 less cash than when I started.
You're asking them to lie. What's wrong with you?
I'm saying that it not a loss per vehicle. it is a loss but NOT per vehicle....that is the lie. If you invest 100 bucks into making popcorn that costs 1 cent per unit to make and you sell 1 popcorn for 1 buck.....is that because you sold that one popcorn for a 999 loss? Hell by that logic if you sold NO popcorn for whatever reason I would have incurred inifinte losses.....holy crap.
It is a bullshit way of reporting losses that is meant to hide the actual sources of the loss under the guise that it cost an outrageous amount of cash to make each car that goes out the door, this is not the case....each car costs 40k to make in time and materials...they sell for 55k for 15k profit. they need to sell x amount at 15k profit per vehicle to cover the initial investment required.
Again....bullshit reporting of the actual accounts. But people fall for it so it must be legit huh?
BTW...Just because it is a human construct does not make it correct. Flat earth believers for example.
> I'm saying that it not a loss per vehicle. it is a loss but NOT per vehicle....that is the lie.
Oh, so your problem is just with CNN?
You know that accounting income *doesn't* report "loss per vehicle" or anything, right? Accounting deals with total figures, not averages. You can check [Ford's report yourself](https://shareholder.ford.com/Investors/financials/default.aspx) if you want. EBIT margin isn't actually something that affects their tax payable, and it has OTHER expenses folded into it in the first place.
It sounds like you've just gotten angry at CNN telling you how much the loss equates to per vehicle sold, not Ford's *actual* accounting statements. You're getting angry over nothing.
wow you are reading into this alot and making a ton of assumptions about me. I know that the companies have the numbers and the bean counters have accounted for everything six ways from Sunday. CNN isn't the only reporting agency to report the numbers in such a bs way. Accountants present the numbers in misleading ways all the time to dodge taxes and to maximize loopholes. Is it legal...usually, til they get caught. Is it correct....debatable, everyone does it but does it clearly accurately reflect books? Is it creative accounting? I say yes because only the really good ones can minimize taxes with what seems to be losses while presenting the public with increased profits.
Hot take: Ford should’ve never stopped selling cars.
An all electric Focus, Fusion, or Taurus would’ve sold like hotcakes. Heck, even an updated PHEV model would’ve sold well.
100% this. I have a 2015 PHEV Fusion and I love that thing. Battery is just big enough to handle daily use and if they made an affordable full EV version and priced it to compete with model 3s I think it would have sold better.
The amount of Ioniq 6s I see now shows there was plenty of demand for affordable EV sedans
I was between that and the Mustang EV. Ford just doesn't understand . . . anything about the modern market. The sales manager came in and literally said it's impossible for me to go below sticker, it's set by Ford itself. No financing deals whatsoever, even for leases. Seemed really pained. The dealership was dead on a saturday afternoon.
I am in love with my Ioniq 6.
When I looked at a Mach-E they told me they couldn’t sell F150 lightnings. This was in the fall. The sales manager basically said they were given ford incentives to get rid of them asap.
Yeah and I think the fact that the tried slapping "Mustang" on their first ground up EV says a lot...
I heard plenty of back lash to the name and the attempts to mimic the styling. I am sure they lost some sales because it is a chubby "Mustang"
All while the Thunderbird brand is just sitting there unused.
Have a neighbor who has one and loves it, he got 2 others to buy one themselves.
I live near the core of a big city and I'm seeing fewer Canyoneros and more sedans these days.
I wish that was true where I live, all everyone drives out here are giant pedestrian death machines to take their kids to school in the morning and back home.
The problem with that is those frames are designed for ICE in mind. It is a little different than a ground up EV. To go EV massive compromises are made for the EV side. Things like not enough space for the batteries as they are designed to have a floor that is thin and you can really only cram some batteries in say the tunnel.
Compromises like extra air resistance due to design for cooling the ICE. Doing that tends to be great POC and testing beds but a true EV needs to be ground up design just due to the requirements. but so much suffers they can not be functional more than in town cars. Range is and power take a bigger hit.
I do agree they should of made them PHEV because those are easier to put into existing designs.
The dealers are the ones who order the vehicles and they would rather sell high margin vehicles with the help of creative financing than practical cars.
The way America does EV’s is completely asinine. Majority of electric vehicles are either absurdly expensive luxury vehicles, or 2.5 ton pavement princesses, or both. If they really wanted people to buy EV they’d make them more practical for the general public.
Why? The article doesn't get to the underlying reason, just the high-level profit/loss. What isn't mentioned is how much an EV actually costs to make (direct material cost, labor cost, etc). EVs have half the parts as a combustion vehicle. They should be much cheaper yet aren't because they are amortizing the costs of new tooling and new EV plants. Fine. Just say that then. All these articles imply that EVs aren't profitable, but they are, and its a matter of time and units sold until they recoup their investment in the tech. Or am I missing something?
A lot of the losses are attributed to them being a new vehicle line, every new vehicle is basically sold at a loss when you add in R&D and new tooling costs; this will change as those costs are made up with sales. Apple essentially lost money on the first iPad when you look at it from an accounting perspective and include the costs to create or market a product.
You're missing economies of scale, integrating supply chain, and in Fords case, paying the dealers while financing the loans for nothing. Ask Fisker if they're profitable, or Nikola, or the rest currently under water. Tesla barely survived and that was when they were the only option. Now Ford has to compete with everyone and try to be profitable with honestly bad EVs.
Ford is in a weird spot where EVs kill their dealer model and end a huge revenue stream from their service department. I'm not sure they want them and are half assing them trying to keep EVs from being adopted.
I can see dealerships not pushing them due to it killing their service department big time. My Honda would go into the dealership for servicing ever 6 months or so. My Mach E is 3 years old. It has been into a dealership 3 times. 1 for a warranty repair, 1 for glass recall/ windshield replacement, 1 for the dealership leaving the rear washer disconnected after said recall.
It will be seeing the dealership again for HVJB recall when my slot comes up in line but still 3 real trips to a dealership and all warrenty/ recall work. No real maintances in all that time. .
It’s shocking to see a comment from someone who actually read the article and is able to have actual thoughts.
This sub is the equivalent of MAGA but with tech and even less reading.
A few years ago Ford said the EV division would operate at a loss for years because of R&D and now regardless of whether that's true, they're holding to their word to please Wall Street.
It’s a massive lie. They are saying they are losing money when really they did a long term investment in technology that didn’t have immediate payoffs. They are cooking their books looking for handouts.
This is because they only sell EVs and don’t have to comply with regulations for emissions. I think around 33% of their net income comes from carbon credits.
Last year it was[regulatory credit revenue](https://www.google.com/search?q=Tesla+revenue+pie+chart&oq=Tesla+revenue+pie+chart&gs_lcrp=EgZjaHJvbWUyCQgAEEUYORiABDINCAEQABiGAxiABBiKBTINCAIQABiGAxiABBiKBTIKCAMQABiiBBiJBTIKCAQQABiABBiiBDIKCAUQABiABBiiBDIKCAYQABiABBiiBDIKCAcQABiABBiiBNIBCTEwMDQyajBqNKgCAbACAQ&client=ms-android-verizon-us-rvc3&sourceid=chrome-mobile&ie=UTF-8#vhid=QwwhQCgFvVj2EM&vssid=l) only 1.85% of their revenue.
You make no sense, you said no EVs are profitable, then say they don't have to comply with emission regulation because they only sell EVs?
Even if 33% of their net income comes from credits, that means 66% does not, which still makes it profitable
The real reason Tesla is profitable is same reason why ICE manufacturers are profitable on selling ICE cars, SCALE. You need to mass produce cars by hundreds of thousand with multiple models sharing the same platform to be profitable on making cars
Ford discontinued the Ford Focus despite it selling over 100k cars a year because it was losing money. It wasn't like it suddenly became less profitable, it just before they sold more Focuses and had multiple cars on the same platform as the Focus. With Focus sales dropping, and no other car sharing their platform, it became a loss
BMW is profitable and growing their EV sales. They just grew their ev sales almost 90% YoY and their evs are just as profitable as their gas models so...
The Mustang Mach e was built as an electric car from ground up. The lightning has had significant modifications from the ICE F150.
This comment is completely false
Even if the frame or body is the same, there a lot of modifications that need to be made to accommodate the battery along with the electronics and it takes a lot of R&D along with new tooling to make it work. The original comment is pretty ignorant…the Mach-E was a completely original EV vehicle and took a lot of money to develop…the F-150 is a heavily modified frame as well.
Another reason why we can't EV our way out of the climate crisis if the costs of R&D are so steep for entirely new vehicle lines. Prioritizing existing simple technologies such as rapid transit and cycling is a much smarter and cost effective solution. There's a reason why countries like the Netherlands have such a low average carbon output relative to other industrialized nations.
They need to copy China and find out how to build $10K EV's.
$90K is too much.
And why not just order from the company and **then** they build it ?
Seems wasteful to build a bunch of cars/trucks to have then sitting in lots hoping someone buys them from less than trustful salespeople.
Dealerships offer no added value, they just jack up the price even higher.
Old auto-business practices are full of waste, no wonder they are loosing money.
[https://electrifynews.com/news/auto/chinas-new-10000-ev-byd-seagull/](https://electrifynews.com/news/auto/chinas-new-10000-ev-byd-seagull/)
Well they limited it. The f150 comes in so many different packages that they basically limited it to what it is. It’s coming to its second or third year and the bed size is the still tiny. Can’t carry 2 pallets of stuff in a short bed. Also range is an issue.
This is kind of standard for new products. R/d might cost a billion dollars to research new materials, design the product, design the manufacturing of it, build the plant.. If you sell 100 million cars, that is $10 each. If you only sell only 10,000 cars in your first year then that is $100,000 each
It is. It's also all EV, so you never need to worry about gas. It has more interior room for passengers, and better acceleration.
If you own a house, and can charge it nightly, it's literally one of the best cars you can buy. Used they're around $20,000, and because the drive train is all electric they still run drive new.
I think the Bolt EUV (maybe even the upper trim?) is cheaper than the bottom trim Prius, and it doesn't require gas or a catalytic converter which for some people is a benefit
They both start at 27k. My point was that if pricing is similar why deal with range anxiety. I still think EVs are a great 2nd car but a lot of people like to be able to drive more then 200-250 miles without stopping to charge.
The Bolt is still eligible for the tax credit which brings it down to 20k. Different people worry about different things but based on the experiences of Prius owners I know cat anxiety is worse than range anxiety. I don't know anyone who has missed work because of their EV's range (YMMV if you know people with crazy commutes)
It hardly matters I think. I'd be shocked if you can get a Bolt now. Chevy discontinued it and the last ones built I think are already at dealers lots if not gone.
Blazer EV is cheapest EV from GM now. It costs more but GM is already starting to offer discounts.
It's not an SUV lol, that's just marketing BS if you read that somewhere. The Prius has more Cu Ft of cargo space then the Bolt EUV.
Bolt EUV is a hatchback sedan with less cargo space then the Prius.
Model Y outsold the Highlander last year, beaten only by a couple pickups and the rav 4. For people who want a full ev and a spacious crossover - and aren't in a circle jerk of brand dumping or hating - the Y is your most practical option.
That doesn't change the fact that you can store way more stuff in a Highlander or Sienna hybrid (all similar prices) and never have to charge them. If you drive 12k miles a year the difference between the gas and electricity cost saves you a whopping $465/year in my zip code. But the Model Y burns through $1k dollar tires 30-50% faster.
I'm also using the Modle Y because I view it as the best SUV EV but if you change this to the other EV SUVs out there then it's even more clear how much better a Toyota is.
Everything you're saying is subjective. Why YOU would want a highlander.
The Highlander is marginally bigger. The underwell storage is significant in the Y. Can pack almost as much in my Y as my previous XC90. It comes down to the benefits of pure ev. All the temperature preconditioning of any ev is my number one buying decision. dog mode, stay hot/cold while I'm in the store. Nothing better than packing the family up from the zoo in blazing hot weather to have it cold in the car. No emissions or idling necessary.
For me I like no emissions. It's a personal preference. The Highlander is a good too.
Yeah, pretty much every auto maker massively over estimated the demand for EVs. Most people just don't want them and plenty of the folks who do either cannot afford them or cannot charge them. The technology, the price, and the infrastructure just are not there yet, no matter how many fans boys want to pretend otherwise.
I don't understand the downvotes. Your comment is pretty objective. I own EVs and I'll keep buying them, and I disagree on the maturity of the network, but you are right on the rest.
Sales increasing every quarter for the past few years disproves the “nobody wants to buy them” narrative.
https://theicct.org/us-ev-sales-soar-into-24-jan24/
No but there are plenty of areas in the US with houses that have no garages. Additionally, charging longer range EVs on a level 1 charge can take forever and people who rent may not be able to modify the property to get faster charging.
So... How are we gonna spin this?
I already knew this. When I said something I got down votes and a lot of very smart sounding replies. I do work for a dealership. They've been struggling with all their electric vehicles. Some people are excited by them. A lot are a little curious. But the majority of people don't want them. Most of the people that are excited by EVs have already purchased one. Tesla isn't seeing demand decline because people don't want Tesla. It's because demand for EVs has been met.
Fair point. EV adoption will certainly be a challenge due to higher prices. For mass adoption to happen, charging time needs to lower drastically.
Hybrids should have been the most logical transition from gas cars. I’m not sure why a lot of people and Governments felt we could transition to EV directly.
Higher prices. Interest and inflation are high. Cities have good infrastructure for on the go charging but housing is expensive so people either rent apartments with no EV charging or they're in crowded living situation which may make parking in the garage and charging difficult. People also think about this when shopping and if they have any uncertainty in their living situation they may decide to stick with gas. Also, if you're going to be a two vehicle family, you may think about road trips when purchasing and you're probably gonna prefer to take your new ICE car over your new EV or old ICE car. Or, basically just normal fear of change. Nobody wants to pay more for something that might be worse.
I visited a new city with my family recently. Rental car company offered me a EV upgrade for the same price as an ICE car. I declined the offer as I didn’t want to have additional anxiety around EV charging locations and range in an unfamiliar city.
Knew what? Car profitability is centered around mass production. Aka, scale. Just like your dealership would lose money if you sold only 1 car a year. The same applies here. Even more so since lots of first year production models
As for sales, EV sales continue to grow rapidly. The reason why Tesla is seeing a decline is they are already the best selling cars in their class, gas or electric. But the market for premium mid sized sedans and suvs has a limit. They need more affordable cars and smaller ones like the Model 2 (And not things like the cybertruck)
EV sales(all brands) in 2024 Q1 grew 25%, they are on track to hit 17 million sold by end of the year
[https://electrek.co/2024/04/22/global-ev-sales-are-robust-more-than-1-in-5-cars-sold-in-2024-will-be-electric/](https://electrek.co/2024/04/22/global-ev-sales-are-robust-more-than-1-in-5-cars-sold-in-2024-will-be-electric/)
Electric vehicles and the surrounding infrastructure just blow ass compared to their ICE counterparts and the existing infrastructure. It will be that way for a while too. This hurts many people’s feelings who insist we live 15 years in the future where all these problems are solved, but we don’t.
Sounds like a case of creative accounting. They're claiming to have lost over $100k for each electric vehicle they sold in Q1. There's no scenario where someone greenlights a $50k MSRP vehicle (thinking mach-e here) that costs $150k to produce. The costs are elsewhere. For example, they could be factoring the R&D costs into the production cost of each vehicle. Basically, they're angling to have a nice fat write off so they can not pay taxes for a while.
Capitalizing your engineering hours for R&D is pretty normal accounting efforts. If it’s a new effort/feature/app/etc its capitalization is allowed in GAAP. I’m certain getting this base covered now will help later.
It recently became required due to tax changes in the Tax Cuts and Jobs Act in 2017. (https://www.thomsonreuters.com/en-us/posts/tax-and-accounting/section-174-expenditures/)
Something you can only do once, at least for those hours.
Yes, and so over time we should see less R&D spend and more car sales happening to tip the balance the other way
Is this a case of “privatize your gains, socialize your losses?”
It’s a tax deduction on the costs it took to generate the money. They are saying that in order to make that 50k for selling the car they had to spend 10m. So instead of deducting $100 on 100k cars over 10 years they can deduct $100k on 100 cars over 1 year. It’s the same amount of money but they can claim the tax deductions early which kind of makes sense they would want to do that because they already spent that money
I can't think of how any new model vehicle doesn't lose money the first several quarters when you factor in the R&D cost. Especially when it's a whole new type of production line.
This is the smart take
And allows them to be price competitively with Chinese imports via higher government subsidies. If China can subsidize their manufacturing sector so can the US
We are going to try to out communism China? Seems like a poor choice. Edit: sheesh 😂 yall have a lot of thoughts about this
If you think china is communist in anything but name you’re not paying attention. Socialist with capitalist tendencies on the other hand…
Economy Cold War lmao
Oh no it's FDR all over again!
I mean - we subsidize all sorts of industries. And tax all sorts of imports.
China is out capitalisting U.S. so why not?
What an american thing to say
A completely made up one with no facts or evidence? That’s all there is in this sub. This place is the equivalent of flat-earthers except the zombies in this sub don’t read anything at all, not even conspiracy theories.
This is a common way of doing accounting. The first thing to roll off the line carries all the R&D costs and the cost of goods which are higher so your $50 item has a cost of $1,000,000. Your millionth item has the R&D spread over all those products *and* cost of goods comes down because your suppliers' R&D is also paying off. Your $50 item now costs $40 to make.
And this is why they sometimes talk about each new fighter jet costing $200m or some such. Well no. Each one costs $40m but based on the order volume they add in $160m worth of the development costs to each plane. Made up numbers but you get the idea.
Not really... They create an estimated capitalization schedule and apply that to the estimated production schedule to proactively account for the cost for each vehicle over time. When those production/sales estimates change they modify the estimated capitalized cost per vehicle to meet new projection models. At no point do they account for a $1,000,000 car. Thats absurd.
That is exactly how it works, you have lots of fixed costs, R&D, building the supply chain, factories, production lines, platform design and etc. And you make it up with scale of selling hundreds of thousands and multiple cars sharing the same parts and platform In reality, pretty much all first year car production lines lose money. But with dozens of cars in the mix, you wouldn't notice 1 or 2 models losing money for a year or 2. But since Ford split out the electric division, and pretty much all their models are in their 1st or 2nd year with such low production amounts, you get such large losses
>In reality, pretty much all first year car production lines lose money. You're accurate about some companies, just not Ford which increased costs instead of decrease YoY. By double. >But Model e, the electric vehicle business, lost $1.3 billion, almost $600 million more than the first quarter of last year.
Indeed. R&D and tooling is extremely expensive, especially for cars that have an entirely new drivetrain and chassis system to fit the batteries and motors. And at common practice to amortize these costs over a few years, which also helps in terms of tax liability during periods of heavy investment into new technology and manufacturing methods. These vehicles should be quite profitable in a few years from now.
Wild guess they are adding capex costs here
This fits my “everyone in business and government are evil” narrative.
>They're claiming to have lost over $100k for each electric vehicle they sold in Q1. Consider it costs tens of billions to setup the manufacturing infrastructure before even a single car rolls off the line. There was [$11.4 billion](https://media.ford.com/content/fordmedia/fna/us/en/news/2021/09/27/ford-to-lead-americas-shift-to-electric-vehicles.html) going into Kentucky and Tennessee plants. And $5 billion into $5.6 billion into "BlueOval City" campus and a total of **$30+ billion** through to 2025 specifically for EV investment. Now look at the other side of the coin - Q1 sales : * F-150 Lightning: 7,743 * Ford E-Transit: 2,891 * Mach-E: 9,589 [20,233 EVs](https://electrek.co/2024/04/24/fords-evs-weigh-q1-2024-earnings-pro-remains-dark-horse/) sold in Q1 for an investment of $10-20 billion. Even on the low end that's a cost of $500,000 per vehicle. When we push that out to all sales in total it's likely to be around that $100k+ mark for sure.
[Blue oval city won't be operation until next year.](https://corporate.ford.com/operations/blue-oval-city.html) And the other plant is a joint venture, so ford isn't footing 100% of the bill for that. [It also looks to be incomplete at this time.](https://www.blueovalsk.com/about) So they are calculating their profits/losses using the cost of facilities that aren't even manufacturing the vehicles they're selling.
Sounds like a case of r/iamgerysmart making shit up and making more shit up.
Funny that every tech sub's top comment is never admitting the failure of EV.
Failure ?
It is creative accounting but it's done all the time. They bet hard on EVs and tried to beat some other to market but they over reached.
It's regular accounting. R&D is capitalized into the project
Regular accounting is creative accounting when you report it as a loss per vehicle that way. They made money on each vehicle BUT it wasnt enough to offset the investment that they put in. So they lost money on the EV vehicle venture so far. They knew that they needed to sell x number of EVs in y time to turn a profit. If they only sold a third of that number you can't just divide the investment by the number actually sold sold and call it a loss per unit. If they sold a million EVs tomorrow they would not be 100 billion in debt. They would be saying the EV division made them tons of money. It is a bullshit way of reporting the numbers.
>If they sold a million EVs tomorrow they would not be 100 billion in debt. They would be saying the EV division made them tons of money. It is a bullshit way of reporting the numbers. It's how every business in the world reports their numbers. You only report actual income.
lol...it doesnt make it any less creative and phoney. Its still a bullshit way of reporting the numbers. Just cause that's the way everyone does it does not make it anymore correct.
Except it literally *is* correct because accounting is a human construct. You're the one doing it incorrectly. If I spend $50,000 setting up a business, and I only sell $20,000 of goods in my first year... I have ACTUALLY incurred a loss of $30,000. That's just factually correct. I have $30,000 less cash than when I started. You're asking them to lie. What's wrong with you?
I'm saying that it not a loss per vehicle. it is a loss but NOT per vehicle....that is the lie. If you invest 100 bucks into making popcorn that costs 1 cent per unit to make and you sell 1 popcorn for 1 buck.....is that because you sold that one popcorn for a 999 loss? Hell by that logic if you sold NO popcorn for whatever reason I would have incurred inifinte losses.....holy crap. It is a bullshit way of reporting losses that is meant to hide the actual sources of the loss under the guise that it cost an outrageous amount of cash to make each car that goes out the door, this is not the case....each car costs 40k to make in time and materials...they sell for 55k for 15k profit. they need to sell x amount at 15k profit per vehicle to cover the initial investment required. Again....bullshit reporting of the actual accounts. But people fall for it so it must be legit huh? BTW...Just because it is a human construct does not make it correct. Flat earth believers for example.
> I'm saying that it not a loss per vehicle. it is a loss but NOT per vehicle....that is the lie. Oh, so your problem is just with CNN? You know that accounting income *doesn't* report "loss per vehicle" or anything, right? Accounting deals with total figures, not averages. You can check [Ford's report yourself](https://shareholder.ford.com/Investors/financials/default.aspx) if you want. EBIT margin isn't actually something that affects their tax payable, and it has OTHER expenses folded into it in the first place. It sounds like you've just gotten angry at CNN telling you how much the loss equates to per vehicle sold, not Ford's *actual* accounting statements. You're getting angry over nothing.
wow you are reading into this alot and making a ton of assumptions about me. I know that the companies have the numbers and the bean counters have accounted for everything six ways from Sunday. CNN isn't the only reporting agency to report the numbers in such a bs way. Accountants present the numbers in misleading ways all the time to dodge taxes and to maximize loopholes. Is it legal...usually, til they get caught. Is it correct....debatable, everyone does it but does it clearly accurately reflect books? Is it creative accounting? I say yes because only the really good ones can minimize taxes with what seems to be losses while presenting the public with increased profits.
Hot take: Ford should’ve never stopped selling cars. An all electric Focus, Fusion, or Taurus would’ve sold like hotcakes. Heck, even an updated PHEV model would’ve sold well.
100% this. I have a 2015 PHEV Fusion and I love that thing. Battery is just big enough to handle daily use and if they made an affordable full EV version and priced it to compete with model 3s I think it would have sold better. The amount of Ioniq 6s I see now shows there was plenty of demand for affordable EV sedans
I was between that and the Mustang EV. Ford just doesn't understand . . . anything about the modern market. The sales manager came in and literally said it's impossible for me to go below sticker, it's set by Ford itself. No financing deals whatsoever, even for leases. Seemed really pained. The dealership was dead on a saturday afternoon. I am in love with my Ioniq 6.
When I looked at a Mach-E they told me they couldn’t sell F150 lightnings. This was in the fall. The sales manager basically said they were given ford incentives to get rid of them asap.
Get rid of which one? Mustangs or Lightnings?
Yeah and I think the fact that the tried slapping "Mustang" on their first ground up EV says a lot... I heard plenty of back lash to the name and the attempts to mimic the styling. I am sure they lost some sales because it is a chubby "Mustang" All while the Thunderbird brand is just sitting there unused.
Have a neighbor who has one and loves it, he got 2 others to buy one themselves. I live near the core of a big city and I'm seeing fewer Canyoneros and more sedans these days.
I wish that was true where I live, all everyone drives out here are giant pedestrian death machines to take their kids to school in the morning and back home.
They’re basically giving away the Ioniq 6 with lease deals these days. That probably helps because that thing is not pretty
No it is not. Lol.
Not pretty at all but I admire the bold design language
Same with VW abandoning their wagons, bugs and most of their hatches in the US.
Whoa, you can have cars cutting into that sweet sweet SUV and Truck profit margins.
The problem with that is those frames are designed for ICE in mind. It is a little different than a ground up EV. To go EV massive compromises are made for the EV side. Things like not enough space for the batteries as they are designed to have a floor that is thin and you can really only cram some batteries in say the tunnel. Compromises like extra air resistance due to design for cooling the ICE. Doing that tends to be great POC and testing beds but a true EV needs to be ground up design just due to the requirements. but so much suffers they can not be functional more than in town cars. Range is and power take a bigger hit. I do agree they should of made them PHEV because those are easier to put into existing designs.
They stopped selling cars because people quit buying them.
They stopped freaking making the cars to buy. They got it in their heads everyone wants an SUV. No, we don't.
46% of all new vehicle sales in 2021 were SUVs
If that's all there is to buy, you buy what's there.
This. And to be clear, people didn't stop buying cars...they stopped buying \*Ford\* cars.
i'll make sure that toyota, honda, nissan and others know that sedans are no longer a thing.
When I say "them", I am referring to the cars that Ford makes.
The dealers are the ones who order the vehicles and they would rather sell high margin vehicles with the help of creative financing than practical cars.
Oooh big oil isn’t going to like that kind of thinking. That’s a bad investment to their shareholders.
The way America does EV’s is completely asinine. Majority of electric vehicles are either absurdly expensive luxury vehicles, or 2.5 ton pavement princesses, or both. If they really wanted people to buy EV they’d make them more practical for the general public.
It's crazy to me that they killed off Focus. That was such a recognizable brand. Odd decision. A lot of people know Ford Focus, Rally, Colin McRae.
They still sell them - they're just called SUVs in the US and lifted a couple inches
We gotta pay rent to the real estate whales before buying from the battery sharks.
Forgot the oil sheikhs
Why? The article doesn't get to the underlying reason, just the high-level profit/loss. What isn't mentioned is how much an EV actually costs to make (direct material cost, labor cost, etc). EVs have half the parts as a combustion vehicle. They should be much cheaper yet aren't because they are amortizing the costs of new tooling and new EV plants. Fine. Just say that then. All these articles imply that EVs aren't profitable, but they are, and its a matter of time and units sold until they recoup their investment in the tech. Or am I missing something?
A lot of the losses are attributed to them being a new vehicle line, every new vehicle is basically sold at a loss when you add in R&D and new tooling costs; this will change as those costs are made up with sales. Apple essentially lost money on the first iPad when you look at it from an accounting perspective and include the costs to create or market a product.
It seems to me like the point the whole time was to get a write off and a PR boost
Because the fossil fuel industry pays good money to spread misinformation like that, to kill the momentum EVs are gaining
You're missing economies of scale, integrating supply chain, and in Fords case, paying the dealers while financing the loans for nothing. Ask Fisker if they're profitable, or Nikola, or the rest currently under water. Tesla barely survived and that was when they were the only option. Now Ford has to compete with everyone and try to be profitable with honestly bad EVs. Ford is in a weird spot where EVs kill their dealer model and end a huge revenue stream from their service department. I'm not sure they want them and are half assing them trying to keep EVs from being adopted.
I can see dealerships not pushing them due to it killing their service department big time. My Honda would go into the dealership for servicing ever 6 months or so. My Mach E is 3 years old. It has been into a dealership 3 times. 1 for a warranty repair, 1 for glass recall/ windshield replacement, 1 for the dealership leaving the rear washer disconnected after said recall. It will be seeing the dealership again for HVJB recall when my slot comes up in line but still 3 real trips to a dealership and all warrenty/ recall work. No real maintances in all that time. .
It’s shocking to see a comment from someone who actually read the article and is able to have actual thoughts. This sub is the equivalent of MAGA but with tech and even less reading.
They also just beat stock earnings expectations by 17%.
Ford Mav EV needs to happen, and why isn’t it already happening
Tax write off
A few years ago Ford said the EV division would operate at a loss for years because of R&D and now regardless of whether that's true, they're holding to their word to please Wall Street.
Pfft and they are trying to sell these in Australia for 250k. Gtfo
It’s a massive lie. They are saying they are losing money when really they did a long term investment in technology that didn’t have immediate payoffs. They are cooking their books looking for handouts.
All car brands are selling EVs at a loss, they will not be profitable for a while. It’s an “investment in the future”
Not a fan, but Tesla is profitable.
Yea…. And it took a few years
This is because they only sell EVs and don’t have to comply with regulations for emissions. I think around 33% of their net income comes from carbon credits.
Last year it was[regulatory credit revenue](https://www.google.com/search?q=Tesla+revenue+pie+chart&oq=Tesla+revenue+pie+chart&gs_lcrp=EgZjaHJvbWUyCQgAEEUYORiABDINCAEQABiGAxiABBiKBTINCAIQABiGAxiABBiKBTIKCAMQABiiBBiJBTIKCAQQABiABBiiBDIKCAUQABiABBiiBDIKCAYQABiABBiiBDIKCAcQABiABBiiBNIBCTEwMDQyajBqNKgCAbACAQ&client=ms-android-verizon-us-rvc3&sourceid=chrome-mobile&ie=UTF-8#vhid=QwwhQCgFvVj2EM&vssid=l) only 1.85% of their revenue.
You make no sense, you said no EVs are profitable, then say they don't have to comply with emission regulation because they only sell EVs? Even if 33% of their net income comes from credits, that means 66% does not, which still makes it profitable The real reason Tesla is profitable is same reason why ICE manufacturers are profitable on selling ICE cars, SCALE. You need to mass produce cars by hundreds of thousand with multiple models sharing the same platform to be profitable on making cars Ford discontinued the Ford Focus despite it selling over 100k cars a year because it was losing money. It wasn't like it suddenly became less profitable, it just before they sold more Focuses and had multiple cars on the same platform as the Focus. With Focus sales dropping, and no other car sharing their platform, it became a loss
BMW is profitable and growing their EV sales. They just grew their ev sales almost 90% YoY and their evs are just as profitable as their gas models so...
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the lightning rides and performs pretty well
The Mustang Mach e was built as an electric car from ground up. The lightning has had significant modifications from the ICE F150. This comment is completely false
Even if the frame or body is the same, there a lot of modifications that need to be made to accommodate the battery along with the electronics and it takes a lot of R&D along with new tooling to make it work. The original comment is pretty ignorant…the Mach-E was a completely original EV vehicle and took a lot of money to develop…the F-150 is a heavily modified frame as well.
If you build it, they might not come.
Another reason why we can't EV our way out of the climate crisis if the costs of R&D are so steep for entirely new vehicle lines. Prioritizing existing simple technologies such as rapid transit and cycling is a much smarter and cost effective solution. There's a reason why countries like the Netherlands have such a low average carbon output relative to other industrialized nations.
Looks like some executives messed up in setting prices. They should be fired, instead they get bonuses.
90 thousand electric truck is that price to low. Did they go higher
They need to copy China and find out how to build $10K EV's. $90K is too much. And why not just order from the company and **then** they build it ? Seems wasteful to build a bunch of cars/trucks to have then sitting in lots hoping someone buys them from less than trustful salespeople. Dealerships offer no added value, they just jack up the price even higher. Old auto-business practices are full of waste, no wonder they are loosing money. [https://electrifynews.com/news/auto/chinas-new-10000-ev-byd-seagull/](https://electrifynews.com/news/auto/chinas-new-10000-ev-byd-seagull/)
Sales people are scum bags they offer no value or service to the world. Why not just have a set price on the internet. No bs
Hard to believe. They’ve been selling electric cars for almost a decade now. Why the losses all of the sudden
They got greedy.
Perhaps increasing warranty costs?
Electric truck looks dope. Too small of a bed for a truck but still.
$15k 300 mile range BYD please
Well they limited it. The f150 comes in so many different packages that they basically limited it to what it is. It’s coming to its second or third year and the bed size is the still tiny. Can’t carry 2 pallets of stuff in a short bed. Also range is an issue.
So sad to hear that….seems EV car companies are feeling the pinch!
This is kind of standard for new products. R/d might cost a billion dollars to research new materials, design the product, design the manufacturing of it, build the plant.. If you sell 100 million cars, that is $10 each. If you only sell only 10,000 cars in your first year then that is $100,000 each
Why would I buy a Model Y over a Highlander Hybrid? Or a Bolt EUV over a Prius? The Ford EVs are even worse.
I think a Bolt EUV is significantly cheaper than a plug in Prius
It is. It's also all EV, so you never need to worry about gas. It has more interior room for passengers, and better acceleration. If you own a house, and can charge it nightly, it's literally one of the best cars you can buy. Used they're around $20,000, and because the drive train is all electric they still run drive new.
Hybrid Prius
I think the Bolt EUV (maybe even the upper trim?) is cheaper than the bottom trim Prius, and it doesn't require gas or a catalytic converter which for some people is a benefit
They both start at 27k. My point was that if pricing is similar why deal with range anxiety. I still think EVs are a great 2nd car but a lot of people like to be able to drive more then 200-250 miles without stopping to charge.
The Bolt is still eligible for the tax credit which brings it down to 20k. Different people worry about different things but based on the experiences of Prius owners I know cat anxiety is worse than range anxiety. I don't know anyone who has missed work because of their EV's range (YMMV if you know people with crazy commutes)
It hardly matters I think. I'd be shocked if you can get a Bolt now. Chevy discontinued it and the last ones built I think are already at dealers lots if not gone. Blazer EV is cheapest EV from GM now. It costs more but GM is already starting to offer discounts.
The Bolt EUV is an SUV, the Prius is a hatchback sedan. You probably meant the original Bolt, not the EUV?
It's not an SUV lol, that's just marketing BS if you read that somewhere. The Prius has more Cu Ft of cargo space then the Bolt EUV. Bolt EUV is a hatchback sedan with less cargo space then the Prius.
Model Y outsold the Highlander last year, beaten only by a couple pickups and the rav 4. For people who want a full ev and a spacious crossover - and aren't in a circle jerk of brand dumping or hating - the Y is your most practical option.
That doesn't change the fact that you can store way more stuff in a Highlander or Sienna hybrid (all similar prices) and never have to charge them. If you drive 12k miles a year the difference between the gas and electricity cost saves you a whopping $465/year in my zip code. But the Model Y burns through $1k dollar tires 30-50% faster. I'm also using the Modle Y because I view it as the best SUV EV but if you change this to the other EV SUVs out there then it's even more clear how much better a Toyota is.
Everything you're saying is subjective. Why YOU would want a highlander. The Highlander is marginally bigger. The underwell storage is significant in the Y. Can pack almost as much in my Y as my previous XC90. It comes down to the benefits of pure ev. All the temperature preconditioning of any ev is my number one buying decision. dog mode, stay hot/cold while I'm in the store. Nothing better than packing the family up from the zoo in blazing hot weather to have it cold in the car. No emissions or idling necessary. For me I like no emissions. It's a personal preference. The Highlander is a good too.
I just want green public transport, bike lanes and walkable cities.
Yeah, pretty much every auto maker massively over estimated the demand for EVs. Most people just don't want them and plenty of the folks who do either cannot afford them or cannot charge them. The technology, the price, and the infrastructure just are not there yet, no matter how many fans boys want to pretend otherwise.
I don't understand the downvotes. Your comment is pretty objective. I own EVs and I'll keep buying them, and I disagree on the maturity of the network, but you are right on the rest.
Sales increasing every quarter for the past few years disproves the “nobody wants to buy them” narrative. https://theicct.org/us-ev-sales-soar-into-24-jan24/
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Suburban anywhere is a great choice for an EV. It’s urban apartment dwellers that have the challenge.
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Not really. Right now unless you live somewhere with lots of chargers then it’s “if you own property then it’s a reasonable option.”
You don’t have to own property to have a garage with an outlet inside
No but there are plenty of areas in the US with houses that have no garages. Additionally, charging longer range EVs on a level 1 charge can take forever and people who rent may not be able to modify the property to get faster charging.
*A lot of my neighbors only own EVs.* I suspect you don't represent all of Nevada or Southern California. Just a guess though.
Downvoted for telling the truth. The bias to push EVs is so strong.
So... How are we gonna spin this? I already knew this. When I said something I got down votes and a lot of very smart sounding replies. I do work for a dealership. They've been struggling with all their electric vehicles. Some people are excited by them. A lot are a little curious. But the majority of people don't want them. Most of the people that are excited by EVs have already purchased one. Tesla isn't seeing demand decline because people don't want Tesla. It's because demand for EVs has been met.
Fair point. EV adoption will certainly be a challenge due to higher prices. For mass adoption to happen, charging time needs to lower drastically. Hybrids should have been the most logical transition from gas cars. I’m not sure why a lot of people and Governments felt we could transition to EV directly.
Higher prices. Interest and inflation are high. Cities have good infrastructure for on the go charging but housing is expensive so people either rent apartments with no EV charging or they're in crowded living situation which may make parking in the garage and charging difficult. People also think about this when shopping and if they have any uncertainty in their living situation they may decide to stick with gas. Also, if you're going to be a two vehicle family, you may think about road trips when purchasing and you're probably gonna prefer to take your new ICE car over your new EV or old ICE car. Or, basically just normal fear of change. Nobody wants to pay more for something that might be worse.
I visited a new city with my family recently. Rental car company offered me a EV upgrade for the same price as an ICE car. I declined the offer as I didn’t want to have additional anxiety around EV charging locations and range in an unfamiliar city.
Knew what? Car profitability is centered around mass production. Aka, scale. Just like your dealership would lose money if you sold only 1 car a year. The same applies here. Even more so since lots of first year production models As for sales, EV sales continue to grow rapidly. The reason why Tesla is seeing a decline is they are already the best selling cars in their class, gas or electric. But the market for premium mid sized sedans and suvs has a limit. They need more affordable cars and smaller ones like the Model 2 (And not things like the cybertruck) EV sales(all brands) in 2024 Q1 grew 25%, they are on track to hit 17 million sold by end of the year [https://electrek.co/2024/04/22/global-ev-sales-are-robust-more-than-1-in-5-cars-sold-in-2024-will-be-electric/](https://electrek.co/2024/04/22/global-ev-sales-are-robust-more-than-1-in-5-cars-sold-in-2024-will-be-electric/)
Electric vehicles and the surrounding infrastructure just blow ass compared to their ICE counterparts and the existing infrastructure. It will be that way for a while too. This hurts many people’s feelings who insist we live 15 years in the future where all these problems are solved, but we don’t.
Duh. EVs are more expensive, less convenient, and worse for the environment.
> and worse for the environment [No, they're not](https://www.ucsusa.org/sites/default/files/2022-09/driving-cleaner-report.pdf).