Title: Ford Shares Plunge Over 12% as Company Faces Pandemic Learning Loss and EV Challenges
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In an interview on ‘The Big Money Show’, ‘Fox & Friends Weekend’ co-host Pete Hegseth and Lydia Hu from FOX Business addressed two pressing issues: the concerning learning loss faced by children during the pandemic and the challenges encountered by Ford Motor Co. in its electric vehicle (EV) division.
Ford Motor Co. shares experienced a sharp decline of more than 12% on Friday following the company’s withdrawal of its full-year forecast. The decision was attributed to the uncertainty surrounding its tentative deal with the United Auto Workers and the broader losses in its EV division.
During the third quarter earnings report released on Thursday, Ford disclosed an unexpected loss of $1.33 billion in earnings before interest and taxes (EBIT) within its EV unit. This marked an increase from the $1.08 billion loss incurred by the segment in the previous quarter.
The alarming figures revealed that Ford suffered an operating loss of nearly $37,000 for each EV sold in the last quarter. Additionally, the company projected a full-year loss of $4.5 billion for its Ford Model e unit.
Despite the setbacks, Ford reported an 11% increase in revenue for the third quarter, amounting to $44 billion. Moreover, the company achieved a $1.2 billion profit, contrasting with a loss of $827 million in the same period the previous year.
Ford expressed concerns over the ongoing pressure faced by EVs as customers hesitate to pay a premium for these vehicles compared to other models. The affordability issue surrounding EVs was acknowledged by Ford CEO Jim Farley during the company’s earnings call.
In response to the challenges, Ford announced a reduction in production of its Mustang Mach-E and plans to scale back approximately $12 billion in investments for its EV division. This included the postponement of a second battery plant in Kentucky.
The financial struggles faced by Ford have highlighted the need to address the affordability and demand weaknesses in the EV market. The US Treasury Department recently approved a $7,500 electric vehicle tax credit as a point-of-sale rebate, effective from January 2022. Such incentives may play a critical role in curbing the EV affordability issue.
As Ford continues to navigate the uncertainties within its EV division, industry experts and analysts will closely monitor the company’s strategies moving forward.
REUTERS/Francois Lenoir / Reuters Photos
(Note: This article includes information from Reuters.)