Although Ford Motor Co anticipates its electric vehicle business unit to lose $3 billion this year, the company said it is still on target to reach an 8% pretax margin by the end of 2026.
Prior to a Thursday morning conference for investors and analysts to go over specifics of the automaker’s new financial reporting format, the predicted loss was made public.
Beginning with the first quarter’s results, which will be released on May 2, Ford will start breaking down its Model e (electric vehicles), Blue (combustion vehicles), and Pro (commercial vehicles) reports by business unit (commercial vehicles and services).
Ford estimates that the Model e business will lose $6 billion over the next three years, from 2021 to 2023, including a pro-forma loss of $2.1 billion in 2018. However, Ford anticipates that the unit will turn a profit on a pretax basis by the end of 2026.
Because “that’s how we’re running the firm now,” according to Ford’s chief financial officer John Lawler, the automaker would no longer break out financial data by area, just by business unit.
Ford would no longer announce sales by region but will instead provide quarterly and annual sales as well as market share for the company’s top five international markets, he added.
Ford posted a minor $400 million profit in South America last year, broke even in Europe, and had a pretax loss of $600 million in China. The majority of Ford’s $9.2 billion in earnings before interest and taxes came from North America.
In contrast to the traditional Ford Blue business, which should see a small increase to $7 billion, the company anticipates that its Ford Pro commercial vehicle division would almost double pretax earnings this year to $6 billion.
Lawler reiterated the firm’s goal of achieving a 10% adjusted EBIT margin by the end of 2026.
He claimed that the manufacturer will be able to produce 2 million electric cars by the end of 2026, and 600,000 by the end of 2023, adding, “We intend to fully utilize that capability.”
(Adapted from Investing.com)