Ford Motor Company expects to lose a whopping $4.5 billion from its electric vehicles (EVs) this year, the company said in its second-quarter earnings report released Thursday.
The Michigan-based automaker said its all-electric vehicle division, called “Ford Model e,” has already lost more than $2.8 billion in the first two quarters of this year, including $1.8 billion in the second quarter alone or about $32,000 for every EV Ford has sold.
Ford said the loss reflects the “pricing environment, disciplined investments in new products and capacity, and other costs.” The car company struggled to compete with Tesla, which lowered prices for its electric models earlier this year.
Back in March, Ford expected to lose only about $3 billion from electric vehicles this year, but the company bumped that projection up to $4.5 billion last week.
The disappointing numbers come after Ford made a big push for electric vehicles last year.
The carmaker said it would ramp up its electric vehicle production to 600,000 cars a year by the end of this year. Now, Ford says it will hit that goal next year instead.
In the meantime, Ford executives say the company is working on several new hybrid model cars, which can operate in either electric mode or gas mode.
“You’re going to see a lot more hybrid systems from us,” CEO Jim Farley said Thursday after the company’s earnings report was released.
“What the customer really likes is when we take a hybrid system that’s more efficient for certain duty cycles and then we add new capabilities because of the batteries,” Farley said.
Farley said Ford has been “surprised, frankly” at the popularity of the hybrid model for the F-150 pickup truck. More than 10% of Ford buyers who purchased the pickup truck bought the hybrid model, he said.
Also, more than half, 56% of Ford customers who bought Ford’s Maverick pickup truck bought the hybrid version.
“We’re seeing a lot of customers like that combination of using the batteries for something beyond just moving the vehicle,” Farley said. “And so we’re just listening to the market.”
Some of Ford’s hybrids allow users to plug power tools into the car’s battery or plug in a refrigerator for a tailgate party.
Ford is still moving forward with its plans for electric cars, but may take quite a while for the company to start profiting from them.
Ford sold only 34,000 electric vehicles and hybrids combined in the second quarter of this year, and only 61,575 electric vehicles in the U.S. in all of last year. Some experts say it takes about 100,000 cars sold to even start turning a profit on a new model.
However, the company also touted that its electric vehicle revenue is up 39% and that Ford maintains low prices for electric cars, “further establishing leadership ahead of [the] industry’s next-generation EVs.”
Ford still turns a massive profit thanks to other sectors of the company, raking in $45 billion in the second quarter with a net income of $1.9 billion.
The automobile industry as a whole has raced to adapt ahead of potential government regulations that would require them to produce more electric cars, with car companies spending tens of billions of dollars to develop electric models.
In April, the Biden administration’s Environmental Protection Agency proposed a requirement that would cut emissions by 56% and result in 67% of new vehicles being electric by 2032.
The Department of Energy has also proposed regulations that would push car makers towards electric vehicles, rejecting criticism from some car makers that the rules could cost the auto industry hundreds of billions of dollars in penalties by 2031.