Reversing US Ford Electric Vehicle... Withdrawal of Investment Amid Growing Losses

U.S. automaker Ford has decided to slow down its electric vehicle (EV) business as the price-cutting competition in the EV market intensifies. The company is shifting its strategy from a volume-driven approach to focusing on profitability and investment recovery.

After announcing its third-quarter earnings, Ford revealed on the 26th (local time) during a conference call that it would temporarily suspend part of its EV investment plans. Ford stated, "Due to the inability to withstand downward price pressure, we have decided to hold off on $12 billion (approximately 16.26 trillion KRW) in investments for EV and EV battery production facilities."

Ford reported a total loss of $1.3 billion in its EV business segment in the third quarter alone. Despite a 26% increase in EV segment revenue during this period, the loss doubled compared to the same quarter last year. Earlier in July, Ford had already raised its full-year loss forecast for the EV segment from $3 billion to $4.5 billion.

As a result of the EV price-cutting war triggered by Tesla, Ford remains trapped in a structural limitation where increasing EV production only widens losses. Ford’s loss per EV produced in the third quarter was $36,000, a significant increase from the previous quarter’s loss of $32,350.

[Image source=Reuters Yonhap News]

John Lawler, Ford’s Chief Financial Officer (CFO), said during the conference call after the earnings announcement, "We do not plan to disclose the timing for expanding EV production capacity going forward," adding, "We will operate the EV business flexibly, balancing profitability, growth, and investment recovery." He explained that EV prices are falling faster and more than expected, so Ford will not rush to expand the business at the cost of enduring losses.

Reflecting disappointment in the EV business, Ford’s stock closed down 1.65% in regular trading and was down over 4% in after-hours trading.

Meanwhile, Ford announced in its third-quarter earnings report that its revenue increased by 11% year-over-year to $43.8 billion (approximately 59.34 trillion KRW). Net income for the same period turned positive at $1.2 billion, compared to a net loss of $827 million in the previous year.

Ford stated, "Sales increased across internal combustion engine vehicles, hybrids, and EVs," and added, "Ford’s popular F-Series remained the best-selling brand in the U.S. for the third quarter cumulative period, maintaining its top position for 47 consecutive years."

This content was produced with the assistance of AI translation services.