American auto manufacturers are continuing to admit massive losses on the sales of electric vehicles in the first quarter, with Ford disclosing on Tuesday just how disastrous left-wing mandates have been for their bottom line.
Facing a decreasing market and high interest rates on auto loans, Ford reported it has begun cutting orders from its battery supplies, according to the Western Journal. Sources close to the company told Bloomberg that the oldest American auto brand anticipates losing a mind-boggling $100,000 per EV sold in Q1 of 2024. The all-electric Ford F-150, America’s most popular pickup truck, starts at approximately $50,000, underscoring just how much unmitigated production costs have gone into each vehicle coming off the assembly line. The deficit is more than double what Ford reported last year.
With both inflation and interest rates remaining stubbornly unmoved over the past several quarters, Americans’ enthusiasm for pricey EVs has waned. Sales grew at just 3.3% during the first quarter, down from 47% in 2023 according to the AP. In response, EV companies like Tesla have reported they will scale back on plans to expand their charging networks, further diminishing interest in car models that can’t travel large swaths of the country due to lack of infrastructure. A bitter winter added insult to injury for many EV drivers who found themselves unable to move after charging stations froze into failure.
Ford, which has a market cap of more than $50 billion, expects to lose $5.5 billion on EVs this year, a staggering amount. Revamped plans will see the automaker reduce its spending on battery-powered models by $12 billion in the coming year. Ford CEO Jim Farley recently told Bloomberg that the company’s EV department “is the main drag on the whole company right now.”
“We’ve seen prices coming down quite dramatically and that’s why we haven’t been able to keep up from a cost reduction standpoint,” Ford’s CFO John Lawler told analysts on April 24 on the company’s earnings call. “But we’re targeting to take out as much cost this year as we can on Model E and all in the spirit of driving toward that contribution margin positive.”
The White House is under pressure from both auto unions and manufacturers to curb the government’s regulations around EV production ahead of the November elections.
“Last year, there was a lot of hope and hype about EVs. Early adopters formed an initial line and were ready to buy these vehicles as soon as we had them to sell. But that enthusiasm has stalled. Today, the supply of unsold [battery electric vehicles] is surging, as they are not selling nearly as fast as they are arriving at our dealerships — even with deep price cuts, manufacturer incentives, and generous government incentives,” manufacturers wrote to President Joe Biden in December.
“While the goals of the regulations are admirable, they require consumer acceptance to become a reality. With each passing day, it becomes more apparent that this attempted electric vehicle mandate is unrealistic based on current and forecasted customer demand.”
