Ford Motor announced that its EV unit incurred a $2.1 billion loss last year, while its internal combustion and fleet businesses earned an operating profit of $10 billion. Ford expects a similar outcome in 2023, with an anticipated loss of $3 billion for the EV unit, adjusted earnings of about $7 billion for the internal combustion unit, and adjusted earnings of roughly $6 billion for the fleet business.
In an effort to provide Wall Street with a better understanding of the evolving EV business and how profits from internal combustion businesses fund the electric transformation, Ford unveiled a new financial reporting structure. The restructured reports provide the first detailed look at unit profitability, dividing Ford’s global business into five business units: Ford Blue, Ford Model e, Ford Pro, Ford Next, and Ford Credit.
According to the revised results, the Ford Model e unit incurred a loss of $2.1 billion in 2022, while Ford Blue and Ford Pro generated $6.8 billion and $3.2 billion of adjusted operating income, respectively. This new format aims to make it easier for investors and analysts to track the progress of Ford’s overhaul over time.
Ford plans to build 2 million EVs per year by the end of 2026 and achieve a 10% profit margin on an EBIT basis by that time, with an 8% adjusted EBIT margin for Ford Model e. Before the restructuring was announced, some analysts had urged Ford to spin off its EV business. However, the company’s decision to keep the EV unit in-house provides it with an advantage over EV startups that need to create manufacturing bases from scratch.
To provide investors and analysts with a better understanding of the new reporting structure, Ford will hold a “teach-in” on Thursday. The company will report its first-quarter results on May 2 and provide a deeper dive into its strategy and restructuring efforts at its annual Capital Markets Day on May 22.
