Home » Why Ford Is Losing $100,000 On Every Electric Car It Sells

Why Ford Is Losing $100,000 On Every Electric Car It Sells

Tmd Ford

What a way to start the week. Ford is claiming it has to lose $100,000 on every EV it builds and the Biden administration is hinting it’s going to raise tariffs on Chinese cars to 100%. Get ready for a wild ride for this Monday’s installment of The Morning Dump as I dive into all the big EV-related news.

Right off the bat, we’ve got to talk about Ford’s claim, which is both accurate and, also, a little misleading. And then we should talk about Toyota, which is investing a ton of money in a new facility in Greensboro, NC to build electric cars.

Vidframe Min Top
Vidframe Min Bottom

No entity has invested more into developing cheap electric cars than the country of China, but China has a big problem in that building great cars is not the same as building trust, which is a lesson the country will learn again this week when new trade barriers are put up to keep Chinese cars out of the United States. You know what would build trust? Raising the currency.

And, finally, both Honda and Subaru seem to be doing just fine thanks to a lower-than-usual currency.

What Losing $100,000 Per Electric Car Actually Means

Mustang Mach E Frunk
Filling every Mach-E frunk with Shrimp probably doesn’t help. Photo: Ford

About a decade ago, Ford spent $3 billion to switch the 13th-generation Ford F-series frame from primarily steel to an aluminum-intensive design. This was a massive technological and manufacturing undertaking that, in retrospect, was absolutely the right call.


It also means that Ford lost at least $3 billion on the first new F-150 it made, which is not something I remember Ford complaining about at the time. Instead, I remember Ford PR folks defending the technology and pointing out they were right and that the future would support this decision.

When it comes to EVs, the attitude seems to be quite the opposite.

Let’s get to what people are saying, via Bloomberg, in this article about Ford cutting its battery orders:

A spokesman for Ford said the company typically doesn’t comment on relationships or terms with suppliers. CATL said its “cooperation with Ford is moving forward as normal” without elaborating. SK On and LG said their contracts with Ford remain in effect but didn’t immediately address the prospect of order changes.

As EV prices have plunged and demand has slackened, Ford’s losses per EV exceeded $100,000 in the first quarter, more than double the deficit from last year, one of the people said.

Bloomberg Intelligence estimates the losses Ford expects to sustain in its EV unit this year will come close to wiping out the profits it earns from its Ford Blue division, which makes traditional internal combustion engine vehicles like the Bronco SUV and gas-electric hybrids such as the Maverick truck.

Electric cars are expensive. This makes switching the F-150 from steel to aluminum look like me switching from the 1-minute oatmeal to the 7-minute oatmeal (which, hey, not not a big deal).

But the investment has to be made and it’s rare to hear car companies talk about loss-per-vehicle in the early stages of a technology. David Fickling, a Bloomberg Opinion columnist, made this point over the weekend:


The figure is bogus, dependent on a quirk of US accounting rules that mean the one-time expense of rethinking the automotive power train for the first time in a century is being treated as an ongoing annual expense, and then divided by 2024’s lackluster EV sales.


The enthusiasm with which some auto executives bandy about such spurious figures shouldn’t be taken as a sign of how costly EVs are, but of the deep cultural aversion to change within many US car companies.

I agree it’s important to check automakers on these big loss figures, especially given that battery costs have been going down at a record pace. But I don’t think it’s an aversion to change. Most automakers would be happy to build more EVs and are more than ready for the change. Automakers in Europe and here in America have been quick to jump into autonomous driving and EVs and anything else that looks like the future.

What seems to have happened is that automakers, as public companies with a responsibility to shareholders, got caught out thinking EV adoption was going to be quicker than it was. Tesla’s skyrocketing valuation didn’t help the decision-making.

Last week I explained that Tesla price cuts and the Inflation Reduction Act may have temporarily increased EV adoption, but it’s not going to be a straight line up-and-to-the-right as the lowest-hanging EV adopters have already been plucked. It’s going to be a slog to get the rest of them, even as total EV sales will probably continue to increase.

Going back to the F-150 example, Ford sold more than 750,000 F-Series trucks in 2014 and more than 900,000 yearly by 2018. All electric cars in the United States last year totaled about 1.2 million vehicles spread across Tesla and about 25 other brands, most with multiple EV models.

Ford recoups its F-150 investments quite rapidly, but even with big incentives from the federal government, EVs are going to take longer for most. Ford sold a whopping 24,165 electric F-150 Lightning trucks last year, making it one of the most popular EVs sold in America that isn’t the Tesla Model Y or Model 3.


Rather than being afraid of change, I think automakers were too excited about how easy it would be and lost focus on the potential of hybrids. Then high interest rates arrived to make everything more expensive, coupled with a Tesla-led price war that’s forced many automakers to dramatically lower the price of their cars. As an example, Ford recently cut the F-150 lightning price by as much as $9,000 to keep them moving, which isn’t something you want to do before reaching profitability.

This generation of $40k+ two-row crossovers and modified EV trucks just isn’t what the market needs. GM is far enough ahead and has had enough experience in building electric cars that it thinks its EVs (depending on how you look at the accounting) can be profitable this year, but this was a long and difficult process for GM.

This is why Ford has, probably wisely, slowed down on its interim generation EVs and thrown all its efforts into a low-cost skunkworks car that can sell for $25,000 and be profitable in a year.

Carmakers have to make generational investments in electric cars unlike anything that any auto exec still alive has had to deal with, so when you hear an exec say they’re losing $100,000 a car you can believe them, but it’s not quite the whole story.

Toyota Is Putting $13.9 Billion Into North Carolina

toyota plant being built
Photo: Toyota

I was quite shocked when I first arrived in Greensboro, North Carolina a couple of years ago for a project. My friend went to school there in the early aughts and didn’t have much to say about the place, but this looked like a modern small city.


[Editor’s Note: I grew up in Greensboro, which we used to call Greensboring, but honestly, it’s not that boring anymore. I take my kid there for the retro video game store and seeing penguins at the science center and stuff. Seeing it in these kinds of contexts still feels strange. – JT]

It didn’t hurt that I was the guest of my client, a man who helped rebuild much of the city and therefore put me in a hotel room overlooking the city’s new minor league baseball stadium and the pool. The place had energy.

A little way down the road is Liberty, North Carolina, the little town that’s going to be home to Toyota’s giant battery plant that’ll be building batteries for hybrids, electric cars, and PHEVs.

Automotive News went down there and, unlike Ford’s slowdown, the company is going forward with its plans:

It’s a massive undertaking, Toyota’s largest investment in one location, with multiple buildings in various stages of completion — most of which will eventually boast a half-million or a million square feet under its roof.

Seven buildings in all are dedicated to making batteries, with two production lines planned for each: 10 lines will build battery packs for future EVs and plug-in hybrids; four will build battery packs for hybrids.

Toyota was first critiqued and now, in some circles, lauded for its slow move toward EVs, but the company is working diligently on solid-state batteries and knows that it’ll eventually need that capacity. Imagine a U.S.-built RAV4 PHEV that could qualify for a $7,500 tax credit!


Given how quickly Toyota has dropped the price of its bZ4X EV and is still barely selling them, I can’t imagine how much money Toyota is losing per-EV in the United States.

Biden Likely To Increase Tariffs On Chinese Cars To 100%

President Biden Tours Broad Portfolio Of Evs At Detroit Auto Show
Source: GM

There’s been a lot of talk lately about how good Chinese cars have gotten (as David wrote in his enormous feature), including this also-big feature from InsideEVs and our old pal Kevin, and I’m here to tell you it doesn’t immediately matter. China needs exports and both Europe and the United States need their respective industrial bases (and voter bases). Cheaper EVs aren’t a big enough draw to get these countries to blow up their economies.

Chinese cars were heavily subsidized, and that’s not great for fairness in the world of trade, but fairness isn’t real. I took my mom to see Wicked this weekend for Mother’s Day and this line stuck with me:

The truth is not a thing of fact or reason, the truth is just what ev’ryone agrees on.

That’s just a folksier recasting of Napolean’s “History is a lie agreed upon,” but it’s true.


What’s less fair about Chinese cars isn’t that the country has massively oversubsidized its EV supply chain and battery, nor that it could cajole its citizens into embracing EVs and its companies into building them. What’s unfair is that China isn’t trying to make its citizens that much richer, it is trying to make its citizens compliant. It does this, at least partially, by keeping its currency, the yuen, artificially low so the average Chinese citizen makes more than their parents did, but only so much more.

Here’s a good way to think about it. BYD is supposedly the biggest threat to Tesla and yet, over the last five years, BYD’s stock has increased 376%. Tesla has increased by 1,130%. Hell, you could have made more money by buying the energy drink company Celsius, which is up almost 6,000% over the same period.

The United States and the West didn’t initially have as much of an issue with this when it meant that Chinese companies sent us a lot of cheap goods, but now that China has invested that money into going from being a producer of inexpensive stuff to expensive stuff (and technological stuff that could be used against us) we all of a sudden care.

All of this is to say that the Biden Administration is probably going to make it even more difficult to import Chinese EVs according to this Detroit Free Press report:

Tariffs on Chinese EVs will roughly quadruple under the new Biden plan, the Wall Street Journal reported, citing people familiar with the matter. Senate Banking Committee Chairman Sherrod Brown wants the Biden administration to ban Chinese EVs outright, over concerns they pose risks to Americans’ personaldata.

That’s up from 25% from the Trump administration.


It’s hard to blame Biden, Trump, or any other leader for doing this. Even if you can get past subsidies, labor issues, and the sourcing of materials, modern cars are extremely software-dependent and so there are real potential national security concerns. No one is worried about their BMW spying on them or Germany suddenly supplying arms to Russia, but the same can’t be said about China.

Honda Made 70% More In Profits, Subaru Up 75%

2023 Honda Accord.Toyota announced it made more money than any public Japanese company ever and, while Honda and Subaru aren’t quite there yet, both companies still made massive profits thanks to a weaker-than-usual Japanese yen.

Currency Rules Everything About Me, CREAM, get the cheddar, et cetera.

Honda, like Toyota, doesn’t see itself making as much money this year as it has to make investments. Per the AP:

The maker of the Accord sedan and CR Electric Proto motorcycles was less optimistic about this fiscal year, forecasting that its profit will decline nearly 10% to 1 trillion yen ($6.4 billion), as research and development spending was expected to increase to nearly 1.2 trillion yen ($7.7 billion) from 964 billion yen.

The maker of the Accord sedan and CR Electric Proto motorcycles was less optimistic about this fiscal year, forecasting that its profit will decline nearly 10% to 1 trillion yen ($6.4 billion), as research and development spending was expected to increase to nearly 1.2 trillion yen ($7.7 billion) from 964 billion yen.

Subaru, on the other hand, has the benefit of being connected to Toyota. Via Automotive News:


To achieve the stratospheric surge, Subaru plans to roll out four full-electric crossovers by the end of 2026, including the existing Solterra that is a cross-badged stablemate of the Toyota bZ4X electric crossover. After that, it plans to add four more EVs by the end of 2028.

Osaki said all four EVs in in the first wave, including the Solterra, will be jointly developed and produced with Toyota, which has a 20 percent stake in the smaller Japanese player.

I honestly forgot the Solterra existed.

What I’m Listening To While Writing TMD

I think we’ll be hearing a lot from spin doctors the next few months, so let’s listen to the Spin Doctors for a bit. Unlike me, she can’t be wrong. I’m wrong all the time. Also, I forgot how hard the first line of this song goes for what sounds like adult contemporary music now.

The Big Question

Do you instinctively blanche when you hear that $100,000 number or does it sound right to you?

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El Barto
El Barto
8 days ago

It’s about time a journo called out unfair Chinese policies in undercutting Western industries by heavily subsidizing their domestic industries to effectively dump their product in Western markets. It’s Chinese SOP – sell your stuff much cheaper than the competition until you saturate the market and then slowly raise prices again until you’re making a real profit. Seeing as China has a large sway in controlling the UN, WHO, and WTO, they can get away with these shenanigans.
If you’re buying stuff from Temu, Shien, Alibaba, ebay, Amazon and it’s being shipped from China at low or no shipping prices, then the taxpayer is picking up the bill due to China still being called an emerging economy by a worldwide postal treaty. They’re laughing al the way to the bank.

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
8 days ago

> Do you instinctively blanche when you hear that $100,000 number or does it sound right to you?

I’m usually annoyed, for the reasons you lay out. It’s a meaningless number used to make things sound bad and drum up pity or support for anti-EV views. It encourages coal-rolling Cletus and book-banning Bonnie to complain about the libs destroying the economy and good American jobs, or how Soros invented global warming, or how Hunter is personally coming to ram EVs down everyone’s non-consenting throats.

Apples to apples comparisons like E.G. years to profitability are what matters, and I really do wish OEMs and journos translated those figures into numbers. How long did it take for the F150 retooling to break even? How long do we anticipate the EV tooling to break even? That would be useful. But it doesn’t make people angry and it doesn’t let you nudge elected officials to cut you tax breaks and subsidies lest you drop a nasty sound bite about how Governor X is letting a big American company lose $100k per vehicle and doing nothing to save poor little Ford.

Last edited 8 days ago by Bongo Friendee Harvey Park
8 days ago

A friend bought a Rivian RT1 this weekend and I went with him to pick it up. I have never ridden in a finer car.

If Ford had started earlier and built their EVF150 from the ground up they would not be in this pickle.

In EVs, they are a half a generation behind GM, for god’s sake. GM!

Vetatur Fumare
Vetatur Fumare
7 days ago
Reply to  NosrednaNod

I got to use my friend’s R1T; it is not bad. It has a utilitarian but expensive vibe that I should like, but it’s absolutely ginormous. It’s like a modern iteration of the old International Light Line pickups from the first half of the seventies, similar in design, too.
If they can keep the touch screen count down and if there is a measure of repairability designed in, a Rivian R3 might tempt me in the future.

The Dude
The Dude
8 days ago

My issue with the protectionist tariff on Chinese cars is that (at least my viewpoint) they’re designed to protect the company, but not necessarily the jobs/workers. America also subsidizes big corporations via tax breaks and such too, so to pretend that American car companies aren’t getting corporate welfare is just a flat out li (though granted the Chinese government is probably giving much beefier subsidies ).

Last edited 8 days ago by The Dude
Andy Individual
Andy Individual
8 days ago

It’s actually $97,104.66

I hate the way people throw rounded numbers around.

Peter Andruskiewicz
Peter Andruskiewicz
7 days ago

Well, you could really hurt someone or put out an eye if you threw pointed numbers around

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