Ford has delayed its target of producing 600,000 all-electric vehicles to next year due to significant operating losses of $1.08 billion reported by its Model E business unit in the second quarter, with operating margins at -58.9 percent. Despite this, the EV unit recorded revenue of $1.8 billion in the previous quarter, more than doubling from last year, primarily driven by increased sales of the F-150 Lightning pickup, which saw a 118.7 percent growth compared to the same period last year.
However, sales of the Mustang Mach-E fell by 21.1 percent year-over-year, and the overall EV unit’s figures were down 2.8 percent compared to the first quarter. On a positive note, Ford’s EV sales showed a 35.5 percent increase in June. Additionally, sales of the all-electric E-Transit van dropped by 23.8 percent compared to the previous year, with 1,744 units sold in Q2 2023.
Ford now anticipates a loss of approximately $4.5 billion for its Model E unit this year, attributing it to industry-wide pricing pressure and capacity investments. Despite the challenges, Ford’s CEO, Jim Farley, expressed that the short-term adoption of EVs might be slower than expected, benefiting early adopters like Ford.
The Mexico factory expansion, where the Mustang Mach-E is manufactured, is completed, hinting at potential sales improvements in the second half of the year. The F-150 Lightning pickup received a price cut of up to $10,000 and is set to be equipped with LFP batteries made in North America next year, which is expected to further lower costs. Currently, the Mustang Mach-E is already offered with LFP packs.