Ford scores good overall results but EV losses are piling up

Ford, the North American car manufacturer, made good profits in 2024 but once again recorded a hefty loss in its Model e division. At $5.1 billion, it was even higher than in 2023. Ford now wants to get the division back on track with a change of personnel at the very top and proposes extended-range EVs (EREVs).

In 2024, Ford’s worldwide EV sales dropped 9% compared to 2023, while revenue for the Model e division was down 35% year over year, falling to $3.9 billion.

Overall, the carmaker only sold 105,000 electric cars last year. To put this into perspective, the combustion engine division of Ford Blue sold 2.86 million vehicles last year, while the LCV division, Ford Pro, sold 1.5 million vehicles.

However, Ford’s total number of electric vehicles sold is likely higher since the Ford Pro segment also offers EVs, such as the Ford E-Transit.

Model e division in trouble

At this point, however, we want to focus on the Model e segment, which has so far mainly been associated with the sporty Mustang Mach-E and the electric F-150 Lightning pickup. Deliveries of the latter model were suspended last year due to quality problems. And production had already been cut back before that due to weak demand.

The Capri and Explorer electric cars produced in Cologne, Germany, are new in the Model e segment. However, they were only available for a fraction of the 2024 financial year and are also struggling with demand problems: short-time work was announced at the Cologne plant in November, and Ford plans to cut 2,900 jobs there.

Strange as it may be, the US EV sales from Ford were up. The Mustang Mach-E was sold 51,745 times, an increase of 27%. In Q4 alone, 16,119 Mustang Mach-Es were sold. The model was the second best-selling electric SUV in the US for the whole year, behind the Tesla Model Y.

Ford increased the large F-150 Lightning electric pickup sales by 39% to 33,510 units. The E-Transit sold 12,610 units, an increase of 64%. Despite these rather positive figures for the US market, electric sales are well behind the plan; with total sales of almost two million vehicles, the electric share was just 4.7%.

The Ford Model e electric division has been recording high losses quarter after quarter, so Ford has cut its investments in electric mobility and rescheduled several models.

Top management changes

Ford is dissatisfied with the Model e division, although the chief person responsible was CEO Jim Farley, and is now making personnel changes. Andrew Frick, previously President of the combustion engine division Ford Blue, is also taking over the management of Ford Model e.

In addition, Kay Hart, who has led Ford’s International Markets Group to record profitability, has been appointed General Manager of Ford Model e and will report to Frick. Hart was a key member of Team Edison, which developed and launched the Mustang Mach-E and F-150 Lightning.

“The Model e team will remain laser-focused on delivering a profitable EV business as we launch our next-gen vehicles and solve for the unique needs and experiences of EV customers,” Frick said. “At the same time, we will align our teams to improve our overall distribution and market approach to better serve our dealers, who are core to our retail execution across Ford Blue, Model e, and Pro as they become more specialized,” the new boss added.

In its report, Ford says that Ford Model e has already achieved cost improvements of $1.4 billion in the past year. However, Ford does not yet expect a financial turnaround for 2025: according to the annual forecast, the division is expected to post a loss of ± $5.5 billion this year.

Electrification of large SUVs/trucks

Ford CEO Jim Farley did not mince words while explaining the drawbacks of large, fully electric SUVs and trucks. During Ford’s fourth-quarter 2024 earnings call on Wednesday, the automaker shared its electrification roadmap, reiterating that it would focus on more economically viable small and medium-sized EVs instead of blazing with battery-electric models across all segments.

“For larger retail, electric utilities, the economics are unresolvable,” Farley said. “These customers have very demanding use cases for an electric vehicle. They tow, they go off-road, they take long road trips. These vehicles have worse aerodynamics and are heavy, which means huge and expensive batteries.”

“Retail customers have shown that they will not pay any premium for these large EVs, making them a tough business case,” Farley explained. “Profitability for the large family haulers will instead come from PHEVs, hybrids, and EREVs that on one tank of gas can get over 700 miles of range (1,125 km) but still drive most miles electric,” he added.

Despite some setbacks and the cancellation of its sizeable three-row SUV, Ford is far from done with EVs. The automaker is planning a midsize all-electric pickup truck as a quasi-F-150 Lightning successor.

Also in the pipeline are a family of from-the-ground-up EVs on its so-called ‘skunkworks’ platform and a broadened series of electrified vehicles, including hybrids and extended-range electric vehicles (EREVs), which Farley elaborated on during the call.

Extended Range Electric Vehicles

Farley confirmed that the company is developing both SUV and pickup platforms designed for range-extender EVs without giving a launch date. EREVs differ from plug-in hybrids in that the combustion engine is not connected to the wheels but is linked to a generator that drives the electric motor or recharges the battery.

Ford’s CEO referenced interviews with owners of EREVs built by Li Auto, which has carved out a substantial market in the premium SUV arena in China based on the technology. “We were impressed that the customers thought of these vehicles as EVs,” Farley said on the company’s earnings call on February 5th.

“They do not think of them as hybrids or plug-in hybrids. They drive 95% of the miles electric and plug them in every night. A shift to EREVs in these largest vehicle segments would help drive down prices,” Farley argued.

“For the customer, you’re able to buy an electric vehicle that’s fully comparable to an ICE vehicle in terms of cost,” he explained. “Because there’s no transmission, no gears, no driveline, there’s no duplicate axles, there’s no duplicate powertrain, the incremental investment of fitting that combustion engine is minimal to the customer.”