Ford Motor Company has reported a $5.1 billion loss in its electric vehicle and software business for 2024, with expectations of losing even more in 2025.
The Verge reports that on Wednesday, Ford Motor Company announced its fourth quarter and full-year earnings for 2024, surpassing Wall Street expectations. However, the automaker also reported substantial losses in its electric vehicle (EV) and software division, known as Model e. The company lost $5.1 billion in this segment in 2024, a significant increase from the $4.7 billion lost in the previous year. Furthermore, Ford predicts that losses will continue to mount, potentially reaching $5.5 billion in 2025.
Despite these setbacks in the EV business, Ford’s traditional gas-powered vehicles continue to perform well, generating sufficient revenue to keep the company profitable overall. The automaker reported a full-year net income of $5.9 billion and an adjusted earnings of $10.2 billion. However, Ford cautioned that its earnings may drop by $2 billion or more in 2025 due to the costs associated with new vehicle launches and declining car prices.
During the earnings call, CEO Jim Farley addressed concerns about potential tariffs threatened by President Donald Trump on imports from Mexico and Canada. Farley stated that while a few weeks of tariffs would be “manageable,” prolonged tariffs would have a “huge impact” on the industry, potentially wiping out billions of dollars in profits and adversely affecting U.S. jobs and the entire value system in the automotive sector. He also warned of higher prices for consumers if the tariffs remain in place.
Compared to its rivals in the EV market, Ford appears to be lagging behind. While General Motors released several new electric models last year, including Chevy and Cadillac vehicles, Ford currently offers only three battery-electric vehicles for sale. Moreover, GM’s EV business is showing signs of profitability, while Ford’s continues to struggle.
To address these challenges, Ford plans to introduce a range of powertrains, including battery-electric, plug-in hybrid, and extended-range EVs that use small gas engines to recharge the battery, offering up to 700 miles of range. Farley mentioned that these new models will be built on flexible body-on-frame and unit-body platforms designed specifically for multi-energy powertrains.
Farley has been a huge proponent of EVs, bragging about how much money Ford could save by switching to electric vehicles:
“So I believe there will be, our industry is definitely heading to a huge price war,” said Farley. He noted that the Mustang Mach-E currently starts at around $45,000 but the battery pack alone costs Ford $18,000 to build, a production price that he hopes to lower in coming years.
“Half the fixtures, half the work stations, half the welds, 20% less fasteners. We designed it, because it’s such a simple product, to radically change the manufacturability,” said Farley.
Farley stated that in an effort to compete during the incoming price war, Ford is ready to cut distribution costs and advertising.
Read more at the Verge here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
