On July 25, Ford Motor publicly released its financial report for the second quarter of this year. According to the financial report data, the total revenue of Ford Motor in the second quarter of this year was 47.8 billion US dollars, an increase of 6.2% compared with the same period last year. The net profit was 1.8 billion US dollars, and the adjusted pre-tax profit was 2.8 billion US dollars. It is worth mentioning that although Ford achieved a profit in the second quarter, the performance is still lower than the 37 billion US dollars expected by Wall Street earlier. The official said that the main reason for the lower-than-expected performance is the significant increase in the warranty cost of old vehicles. There are quality-related problems with the models produced in 2021 and before, which led to an increase in the warranty cost to 8 billion US dollars in the second quarter, exceeding the expectations of investors.
In terms of specific business income, the profit of Ford’s commercial vehicle business segment in the second quarter was 2.6 billion US dollars, an increase of 7% year-on-year, and the profit margin was 15%, and the revenue was 170 billion US dollars, and the revenue increased by 9%. The revenue of the fuel vehicle business in the second quarter was 267 billion US dollars, and the operating profit in the second quarter was 12 billion US dollars.
The electric vehicle business segment is the loss area of Ford Motor. The electric vehicle revenue in the second quarter was 11 billion US dollars, and the pre-tax profit loss was 11 billion US dollars. Combined with the electric vehicle sales volume of 26,000 in the second quarter, it is not difficult to calculate that Ford Motor loses 42,300 US dollars for each electric vehicle sold. In the first half of this year, Ford’s electric vehicle business has accumulated a loss of up to 25 billion US dollars. Regarding the loss of the electric vehicle segment, the official said that it is mainly due to the decrease in wholesale sales and price pressure in the industry, and it is expected that the Model e electric vehicle business will lose 50 to 55 billion US dollars this year.
According to the information: Earlier, in order to accelerate the pace of Ford’s electrification transformation and reverse the situation of sluggish sales, Ford divided its business into traditional fuel vehicle and electric vehicle businesses. Among them, the fuel vehicle business is called “Ford Blue”, which mainly focuses on producing traditional fuel engines for sports utility vehicles such as Bronco. The electric vehicle business is called “Ford Model e”, which is mainly responsible for electric vehicle and digital business, and is personally led by Jim Farley, president and CEO of Ford Motor Company, but even such an adjustment has not reversed the sales decline of Ford Mustang Mach-E in the Chinese market.
As the first pure electric vehicle of Ford’s electric vehicle division, Ford Mustang Mach-E is produced by Changan Ford. It was launched on April 23, 2021, and the price range is 24.99-36.99 million yuan. In December 2021, Ford Mustang Mach-E officially started delivery in China. In September 2022, Ford adjusted the electric vehicle channel, and the operating right of Mustang Mach-E was obtained by Ford Electrification & Autonomous Driving Technology Company, and “Mustang Mach-E” was renamed “Ford Electric Horse”.
The start of the domestic price war in 2022 made Ford have to carry out preferential promotions for this model in 2022, and the price reduction range was 20,000-28,000 yuan at that time. But unfortunately, the price reduction did not bring about an increase in sales. The annual cumulative sales volume of Ford Electric Horse in 2022 was 4,860 vehicles, and the cumulative sales volume in 2023 was 2,062 vehicles. In August last year, the official announced that according to Ford’s strategic transformation and business adjustment in the Chinese market, the operating business of Ford Electric Horse in the Chinese market will be taken over by Changan Ford. But in fact, the sales volume of Ford Electric Horse taken over by Changan Ford still has not improved. The data shows that the latest sales volume of Ford Electric Horse is 181 vehicles, and the cumulative sales volume this year is 571 vehicles.
In addition to the sluggish sales of electric vehicles, the Ford fuel vehicle market is also increasingly difficult to sell. The data shows that in 2022, Ford’s sales volume in China was 496,000 vehicles, a decrease of 33.5% year-on-year. In 2023, Ford’s cumulative sales volume in China was 467,000 vehicles, a decrease of 29,000 compared with 2022. With the intensification of competition in the domestic new energy vehicle market in recent years, Ford has also made a series of adjustments, such as laying off staff to save costs and accelerating the electrification transformation. But at present, the electrification pattern of the domestic auto market has undergone tremendous changes, and the speed of Ford’s electrification transformation is relatively slow, which also means that it will face a series of difficulties in the domestic market in the future.
Regarding the severe market competition in the future of Ford, Ford CEO Jim Farley once said that the company will focus on small, high-profit electric vehicle models and emphasize the importance of software and subscription services. According to the official plan, in 2026, Ford’s global electric vehicle production capacity is planned to exceed 2 million vehicles, and the sales volume of electric vehicles will account for 50% in 2030. However, in the face of the increasingly white-hot intelligent electric vehicle products in the Chinese market competition, how Ford can speed up the electrification speed and increase the sales volume of electric vehicles, these two aspects will also be a huge challenge for Ford Motor.
