In late July, Ford predicted its electric vehicle business unit, Model e, could lose $4.5 billion more than expected this year because of slower-than-expected adoption of the new technology.
Despite the potential possible losses, Ford is still pursuing EV growth plans, reported CEO Jim Farley on Ford’s second-quarter earnings call last month.
"While the path to sustainable profitability may not look quite the same as we previously thought, we're confident in our ability to deliver through a more efficient product design, cost efficiencies and growth in software and services, which will continue to accelerate," he said on the call.
The automaker is driving forward plans to build 400,000 EVs annually but has slowed the timeline for when that will happen.
Instead of 2023, the automaker now says it will reach that destination some time in 2024. The company also has delayed its production goal of two million EVs by 2026, reported Automotive News.
Ford reported that it expects 8% margins on EVs in 2026. A second-generation EV platform will help the automaker achieve the goal, which includes a full-size pickup built in Blue Oval City, a planned automotive production complex in Tennessee, and a three-row crossover built in Canada.
Farley noted next-generation products will have simpler assembly and software upgrades, which may utilize a software subscription model to generate additional profits.
The Automotive News article reported that Ford expressed confidence in the demand for its current EVs, including the F-150 Lightning, Mustang Mach-E and E-Transit.
"As we've demonstrated over the last several years, we will continue to be laser focused on disciplined capital allocation and ultimately delivering a leading and profitable EV footprint that provides us with the flexibility to scale based on customer demand,” Farley told investors.
Originally posted on Auto Dealer Today