Automaker Ford is pushing back its electric vehicle production targets amid deepening losses at its Model e EV division..Ford’s EV experience represents a broader industry conundrum as unsold cars pile up on lots amid waning consumer demand..Ford’s annual production goal of 600,000 units, initially expected by the end of this year, has been delayed to 2024..It had hoped to be producing three times that number by 2028, but that too is dependent on maintaining “flexibility, balancing growth and profitability,” on the way to attaining a two million annual production target..In releasing second quarter financial results, Ford’s Model e division reported higher revenues of US$1.8 billion or double from last year. However, it was more than offset by a $1.08 billion operating loss on 60% lower operating margins..It now expects to lose $4.5 billion for the full year, citing price wars among competitors — Tesla — new investments to build factories and other costs. It lost $2.1 billion last year, bringing total EV losses to more than $6 billion since 2021..“The near-term pace of EV adoption will be a little slower than expected,” CEO Jim Farley said in a statement. “The shift to powerful digital experiences and breakthrough EVs is underway and going to be volatile.”.Sales of its Mach-E Mustang SUV, which is manufactured in Mexico, were down 20% due to unplanned downtime. Sales of its electric truck, the F-150 Lightning, more than doubled to 4,466 units in the quarter after it slashed prices by up to $10,000 in the US and $15,000 in Canada..The company said it completed capacity expansion for the Mach-E and will be offering LFP — lithium iron phosphate — batteries which are cheaper and more reliable. .The LFP power cells don’t require cobalt, are safer with less susceptibility to fire, and last five times longer than conventional lithium ion. The downside is that they’re lower voltage. The Lightning will get the LFP batteries starting next year. .But Ford’s woes are emblematic of the larger malaise affecting the entire EV landscape, namely they’re just too expensive and unreliable, with lack of chargers being a top concern according to JD Power and Associates..Nearly half (49%) of shoppers rejecting the idea of buying an EV say their primary reason is a lack of charging station availability which has been the top reason for rejection since the inception of the JDP study in 2021. .“Most EV owners will say charging is one of the greatest benefits of ownership, because 85% of it is done at home,” said Stewart Stropp, executive director of EV intelligence. “But it’s the exceptional use case—like a vacation road trip—that’s holding shoppers back.”.Respondents were also concerned about EV performance in extreme temperatures, cost of ownership, lack of repair shops, reliability and power outages. .Not to mention sticker shock. .According to the Canadian Automobile Association, prices for EVs range from $40,000 to $189,000, or an average of $83,510. According to AutoTrader.ca the average for a similarly equipped new gasoline vehicle was about $58,000 last year, and about $36,000 for used..Consequently, unsold inventories are starting to pile up in both Canada and the US..According to Cox Automotive the number of unsold inventories is up 350% this year, to almost 100,000 units in the US or nearly three month’s supply. That doesn’t include Tesla, which sells direct to customers..Genesis, the Korean luxury brand, reportedly sold only 18 of its $80,000 G80 sedans in the US for the entire month of June..The exception is Toyota, which is focussing on hybrids rather than fully electrics. It has only one fully electric model, the Bz4X, which isn’t selling either..“It's a ‘Field of Dreams’ moment for automakers making big bets on electrification — they've built the cars, and now they're waiting for buyers to come,” said Jonathan Gregory, Cox’s senior manager of economic and industry insights.
Automaker Ford is pushing back its electric vehicle production targets amid deepening losses at its Model e EV division..Ford’s EV experience represents a broader industry conundrum as unsold cars pile up on lots amid waning consumer demand..Ford’s annual production goal of 600,000 units, initially expected by the end of this year, has been delayed to 2024..It had hoped to be producing three times that number by 2028, but that too is dependent on maintaining “flexibility, balancing growth and profitability,” on the way to attaining a two million annual production target..In releasing second quarter financial results, Ford’s Model e division reported higher revenues of US$1.8 billion or double from last year. However, it was more than offset by a $1.08 billion operating loss on 60% lower operating margins..It now expects to lose $4.5 billion for the full year, citing price wars among competitors — Tesla — new investments to build factories and other costs. It lost $2.1 billion last year, bringing total EV losses to more than $6 billion since 2021..“The near-term pace of EV adoption will be a little slower than expected,” CEO Jim Farley said in a statement. “The shift to powerful digital experiences and breakthrough EVs is underway and going to be volatile.”.Sales of its Mach-E Mustang SUV, which is manufactured in Mexico, were down 20% due to unplanned downtime. Sales of its electric truck, the F-150 Lightning, more than doubled to 4,466 units in the quarter after it slashed prices by up to $10,000 in the US and $15,000 in Canada..The company said it completed capacity expansion for the Mach-E and will be offering LFP — lithium iron phosphate — batteries which are cheaper and more reliable. .The LFP power cells don’t require cobalt, are safer with less susceptibility to fire, and last five times longer than conventional lithium ion. The downside is that they’re lower voltage. The Lightning will get the LFP batteries starting next year. .But Ford’s woes are emblematic of the larger malaise affecting the entire EV landscape, namely they’re just too expensive and unreliable, with lack of chargers being a top concern according to JD Power and Associates..Nearly half (49%) of shoppers rejecting the idea of buying an EV say their primary reason is a lack of charging station availability which has been the top reason for rejection since the inception of the JDP study in 2021. .“Most EV owners will say charging is one of the greatest benefits of ownership, because 85% of it is done at home,” said Stewart Stropp, executive director of EV intelligence. “But it’s the exceptional use case—like a vacation road trip—that’s holding shoppers back.”.Respondents were also concerned about EV performance in extreme temperatures, cost of ownership, lack of repair shops, reliability and power outages. .Not to mention sticker shock. .According to the Canadian Automobile Association, prices for EVs range from $40,000 to $189,000, or an average of $83,510. According to AutoTrader.ca the average for a similarly equipped new gasoline vehicle was about $58,000 last year, and about $36,000 for used..Consequently, unsold inventories are starting to pile up in both Canada and the US..According to Cox Automotive the number of unsold inventories is up 350% this year, to almost 100,000 units in the US or nearly three month’s supply. That doesn’t include Tesla, which sells direct to customers..Genesis, the Korean luxury brand, reportedly sold only 18 of its $80,000 G80 sedans in the US for the entire month of June..The exception is Toyota, which is focussing on hybrids rather than fully electrics. It has only one fully electric model, the Bz4X, which isn’t selling either..“It's a ‘Field of Dreams’ moment for automakers making big bets on electrification — they've built the cars, and now they're waiting for buyers to come,” said Jonathan Gregory, Cox’s senior manager of economic and industry insights.
