But this is the future of the industry?
The bad news for Ford just keeps coming. In the latest batch, the company says its electric vehicle division was a $2.1 billion drain on an operating basis in 2022. While some media outlets and the automaker are spinning this as a win because Ford gained $10 billion in operating profits thanks to its traditional vehicles and fleet sales, it doesn’t bode well for the future.
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After all, Ford has pretty much gone all-in on EVs in a belief they’re the future of the industry. Much like how it basically abandoned car sales to Hyundai, Kia, and others in favor of going all-in on trucks and SUVs, Ford seems to be doing little to nothing in the way of developing new internal combustion engine technologies.
In other words, the company is coasting on fumes as it shovels money and other resources to electrification, the part of the business that’s losing big money. Supporters of electric cars will argue those operational losses will turn into big profits once Ford “figures out” how to really make money selling EVs, but we think this is misguided.
Putting all one’s eggs in a single basket, in this case electrification, seems to be a pretty dumb move. While some governments have electrification mandates in place, those could easily be moved back or even eliminated. Yet Ford is moving forward seemingly with the assumption that going all-electric for its entire product lineup is inevitable, or even worse a good thing.
While the Ford Lightning and Mach-E have been posting some impressive sales, they’re also novelty vehicles. Once the early adopters have all snatched one up, the core of the market could easily reject them based on practical limitations. After all, cold weather, towing, and other routine challenges can greatly cut down range.
In other words, Ford could be leaning into something that not only is a losing proposition now, but could bring further losses in the future.
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