Ford loses $1.3 billion to EV segment, but hybrid and electric sales grow

Ford's electric vehicle business is far from profitable, but various models in its collection of hybrid and battery electric vehicles saw a significant sales boost year on year, according to the company's first-quarter earnings report.

Revenue in Ford's electric vehicle segment, dubbed "Model e," declined year on year, with the company citing "significant industrywide pricing pressure" affecting the EV market.

Executives on Q1 earnings call said high production costs are contributing to the challenge. The company had announced April 4 a two-year delay in its plans to launch a new three-row EV "to take advantage of new battery chemistry and formats," CEO Jim Farley said on an April 24 earnings call.

Taking advantage of emerging technologies would "substantially reduce the cost of the batteries for that vehicle," Farley said. "We will do everything it takes to be profitable in the first 12 months of our vehicles," he said.

The company will reduce its expenditures in the EV segment to match "revised expectations" for the pace of EV adoption, it stated.

Ford expects EV costs to improve going forward but to be offset by top-line pressure, according to a company statement.

It reported a quarterly loss of $1.32 billion in the Model e segment before interest and taxes. This represents an additional $598 million lost compared to Q1 2023.

In the meantime, many Ford models saw an increase in Q1 sales year on year. The company cited increased availability of fast-charging stations and slashing EV prices as reasons for increased sales.

The company saw 36% growth in hybrids in Q1 year on year, Farley said.

"For the first time, some of our contribution margins on hybrids are above or at similar contribution margins, than our pure internal combustion engine margins," he said.