Electric Vehicles (EVs) are hurting the profits of car giant Ford, which is expected to lose a staggering $4.5 billion this year. The company published the results for its second quarter on August 3, and an increase in EV sales initially looks positive. Revenue for sales of the Ford Model e, its primary EV offering, grew by 39%, but overall projections still predict an enormous loss.
Analysts say Ford has already adjusted, including slashing the price of some of its EVs. The cost of the F-150 Lightning pickup truck has dropped by 17%, and Ford says the resulting demand is up by 600%. The automaker declares it will triple its annual production capacity to keep up with growing orders. However, the EV market is generally not as large as was hoped and predicted.
“The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford,” a company news release stated.
According to the International Energy Agency (IEA), the global market for EVs has grown every year since 2010, exceeding 10 million by 2020. The market grew by 43% between 2019 and 2020 but still represented a tiny fraction of cars on the road at just 1%. China had the largest fleet at the turn of the decade with 4.5 million vehicles, while Europe was in second place with 3.2 million.
In the United States, sales are skyrocketing, but as with China and Europe, still constitute a fraction of the market. The Department of Energy measures the US uptake of EVs in overall EV sales and the plug-in hybrid electric vehicles (PHEV) market. EV sales grew by 85% between 2020 and 2021, and PHEV sales increased by 138%.
In January 2023, statistics showed that despite an increase in uptake, electric vehicles still account for only around 1% of cars on American roads. Almost half of consumers – 46% – remain unconvinced and say they are unlikely to switch to an EV.