Ford EV business loses $1.3 billion in Q1 2024

[Sprintey]

Originally Posted by ivorya

Pressure from Far-Right politicians and car makers have turned the boat, once again.

All i can see it doing is playing further into the hands of Tesla and the Chinese companies (BYD etc). When these OEM's start the electric again, they'll even further behind and require major public help or have to shut down.

They're more likely to be seconded into making drones and munitions at the rate the world is going, nevermind the EVs.

Edit: politicians, French are voting as we speak, sportsbet has Trump at 1.57 currently so there goes the neighbourhood, again

[Sprintey]

Originally Posted by Franco Cozzo

How is that any different to oil? Oil resources in the Middle East are not 'unlimited' either

We're sitting on 130 years reserves worth of lithium as we sit, with the stuff we already know about.

Australia, Afghanistan and Chile have some of the worlds largest reserves of lithium globally.

Battery technology as it sits is already more than adequate for Australians and their vehicle usages of 12,000km/year.

A bit different to oil as there will be two parallel supply chains, as a new cold war for green tech develops. China has the lead, and we currently get their cars and batteries. Australia has great resources and our companies are setting up offtake agreements increasingly with EU, Korean and Japanese firms. Our RE/Li miners have been classified as being able to access funding under US capital markets as part of all this hoo-ha, which is a massive boost to them.

[ivorya]

Originally Posted by Itsme

Until they find a better solution for battery design, BEV vehicles will be restricted, Lithium resources is not unlimited.

There's enough Lithium to go around for many yrs to come. No need to land mine, the ocean is where most of it is. ALso, no need to keep mining as many companys are now demanding recycled Li.


Latest battery research just released here https://www.youtube.com/watch?v=yZhKqpleAXM&t=639s

[Syndrome]

Finally some sanity

https://thedriven.io/2024/07/23/too-...ctric-by-2030/

[GT1533]

And another USD 1.1 billion in the second quarter.

Ford Motor reported earnings that were worse than what Wall Street had expected: Its commercial business couldn’t overcome higher warranty costs. And the stock took it on the chin Thursday.

On Wednesday, Ford announced a second-quarter operating profit of $2.8 billion, down 26% from $3.8 billion reported in the second quarter of 2023. Wall Street was looking for $3.7 billion, according to FactSet.

The stock took the brunt of the frustration. When Thursday’s closing bell rang, shares were 18.4%—at $11.16. It was the worst drop since Nov. 18, 2008, when shares dropped 25%.

Ford’s traditional car business, called Ford Blue, generated an operating profit of $1.2 billion, some $300 million better than in the first quarter. More improvement was expected. High warranty costs continue to be a drag on results.

Warranty expenses were up $800 million compared with the first quarter. That puts the quarterly warranty expense at roughly $2 billion, or 4% of sales. That’s high for a car company. Ford, however, said those costs are mainly tied to model year 2021 vehicles and earlier.

“Warranty has been a growing issue at Ford over the last five years and has escalated over the past year,” wrote Freedom Capital Markets analyst Mike Ward in a Thursday report. “Between 2011 and 2019, warranty averaged 1.6% of revenue but since the beginning of 2022 accruals have
averaged 2.9% and exceeded 4% in the second quarter.

Ford’s EV business, called Model e, lost less money—a positive. It reported a loss of $1.1 billion compared with $1.3 billion in the first quarter.

Ford’s commercial business, called Ford Pro, earned $2.6 billion, down from $3 billion reported in the first quarter of 2024. Still, operating profit margins in the Pro business were 15.1%, about flat year over year. That’s the strongest margin of Ford’s three business segments.

However investors choose to look at the numbers, overall operating profit missed expectations.

If there is a silver lining for Ford investors, it is guidance. For the full year, Ford still expects to earn about $11 billion in operating profit. That is the same as the midpoint of guidance given in April. Ford reported a 2023 operating profit of $10.4 billion

https://www.barrons.com/articles/for...price-70e0e48e


..

[Sprintey]

Originally Posted by Syndrome

Finally some sanity

https://thedriven.io/2024/07/23/too-...ctric-by-2030/

Could they be... listening to customers?

"“I don’t think we can go all in on anything until our customers decide they’re all in, and that’s progressing at different rates around the world,” said Gjaja, citing lacklustre customer adoption of EVs which has been fuelled by high battery costs and declining government incentives."

[Dr Smith]

Originally Posted by GT1533

And another USD 1.1 billion in the second quarter.

Ford Motor reported earnings that were worse than what Wall Street had expected: Its commercial business couldn’t overcome higher warranty costs. And the stock took it on the chin Thursday.

On Wednesday, Ford announced a second-quarter operating profit of $2.8 billion, down 26% from $3.8 billion reported in the second quarter of 2023. Wall Street was looking for $3.7 billion, according to FactSet.

The stock took the brunt of the frustration. When Thursday’s closing bell rang, shares were 18.4%—at $11.16. It was the worst drop since Nov. 18, 2008, when shares dropped 25%.

Ford’s traditional car business, called Ford Blue, generated an operating profit of $1.2 billion, some $300 million better than in the first quarter. More improvement was expected. High warranty costs continue to be a drag on results.

Warranty expenses were up $800 million compared with the first quarter. That puts the quarterly warranty expense at roughly $2 billion, or 4% of sales. That’s high for a car company. Ford, however, said those costs are mainly tied to model year 2021 vehicles and earlier.

“Warranty has been a growing issue at Ford over the last five years and has escalated over the past year,” wrote Freedom Capital Markets analyst Mike Ward in a Thursday report. “Between 2011 and 2019, warranty averaged 1.6% of revenue but since the beginning of 2022 accruals have
averaged 2.9% and exceeded 4% in the second quarter.

Ford’s EV business, called Model e, lost less money—a positive. It reported a loss of $1.1 billion compared with $1.3 billion in the first quarter.

Ford’s commercial business, called Ford Pro, earned $2.6 billion, down from $3 billion reported in the first quarter of 2024. Still, operating profit margins in the Pro business were 15.1%, about flat year over year. That’s the strongest margin of Ford’s three business segments.

However investors choose to look at the numbers, overall operating profit missed expectations.

If there is a silver lining for Ford investors, it is guidance. For the full year, Ford still expects to earn about $11 billion in operating profit. That is the same as the midpoint of guidance given in April. Ford reported a 2023 operating profit of $10.4 billion

https://www.barrons.com/articles/for...price-70e0e48e


..

You wonder if the accountants maybe had less control would higher quality result and hence higher profits which would make the accountants happier overall...mind you $10Bill profit isn't so bad, I guess.

[Sprintey]

I'm beginning to suspect the last decade has all been a massive capital misallocation. Have had some doubts for a while, but generally kept it quiet as the Church did not permit heresy online.

If we get a Trump presidency, what happens to many of the green incentives as soon as he turns his attention to them? The US is energy independent in gas and petrochemicals, to remind everyone.

Many years ago, after the 2008 crash, I read this superb article by hedge fund manager Mr Janszen. If you understand that each time it's the same process, albeit with a different 'flavour' or 'mania', you can begin to understand how our economy works.

Note he thought back in 2008 the 'green bubble' would come after the housing-flavoured GFC. QE gave us the 'everything bubble' instead. Green and AI have been growing in the background over this time, and could be the 'mania' of our times, in my opinion.

https://harpers.org/archive/2008/02/the-next-bubble/

[Sprintey]

& here it is from the horse's mouth:

https://www.bloomberg.com/news/artic...ate-on-day-one

[FTE217]

Good look forward to it if it occurs.


Sent from my iPhone using Tapatalk

[Sprintey]

The Donald II: Back with a Vengeance.

[whynot]

Another bump in the road for EV.

Extract from the Wall Street Journal.

By The Editorial Board
Nov. 1, 2024 5:52 pm ET

Ford Motor’s EV October Surprise
Auto workers could lose $5,000 from EV losses. Thanks, Shawn Fain.

Talk about an October surprise for Michigan auto workers. Ford Motor Co. on Thursday said it will idle production of its F-150 Lightning electric truck in Dearborn from mid-November through the end of the year.

Ford’s production stoppage follows a string of ominous announcements, starting in October 2023 when it announced plans to lay off about 700 workers who build the Lightning. In the spring Ford said it would eliminate two of three work crews at the Dearborn plant. In August it scrapped a planned electric SUV.

“We continue to adjust production for an optimal mix of sales growth and profitability,” Ford said Thursday. As any business should. Ford’s EV sales have lagged projections despite steep price cuts. Blame in part a market glut caused by government EV mandates.

Ford has sold a mere 22,807 Lightnings so far this year—a far cry from the 180,000 the Dearborn factory was originally supposed to produce. The EV lobby and its friends in the press fawned over the Lightning when it debuted two years ago. The Lightning supposedly signaled that EVs had finally gone mainstream. Not quite.

...

Ford’s EV division has lost $3.7 billion during the first three quarters of this year—about $55,000 per EV—and expects $5 billion to $5.5 billion in losses this year.

...

They can thank United Auto Workers boss Shawn Fain for backing the Biden Administration’s force-fed EV transition. Stellantis and GM have also reduced shifts and laid off thousands of workers who make internal-combustion engines. Yet Kamala Harris and Michigan Democratic Rep. Elissa Slotkin, who is running for Senate, keep saying EVs will be fantastic for auto workers.

One reason the election polls have narrowed in Michigan is that auto workers watching the EV transition from the front passenger seat don’t believe them.

Interesting ...

We live in a capitalist free market economy. Which means financial rewards for those who succeed and financial losses for those who fail. It also means there are literally thousands of market experiments happening at any one time. One of my favourite quotes: "It is well to remember the tendency of forecasters to overestimate what is likely to occur in the short run and to underestimate or to fail to anticipate altogether what can occur in the long run."

For the pro-EV crowd, it means their forecasts (and excessive politicking) is clearly wrong. The pushing, lecturing, and heckling is just getting folks offside.

However, for the pro-ICE crowd, there are clearly warning signs that once manufacturers figure out the battery's weight/cost/energy triangle, the move towards EV could be very swift.

One thing is for certain, selling product (e.g. EV) is a sure road to closing a business.

[whynot]

Sorry, that last line should read

One thing is for certain, selling product (e.g. EV) at a loss is a sure road to closing a business.