Ford Motor Co. shares closed down over 12% on Friday after the company withdrew its full-year forecast. The decision was made due to “uncertainty” surrounding its tentative deal with the United Auto Workers and losses in its electric vehicle (EV) division.
In its third-quarter earnings report, the automaker revealed a higher-than-expected $1.33 billion loss in earnings before interest and taxes (EBIT) in its EV unit. This is an increase from the $1.08 billion loss reported in the second quarter.
According to the report, Ford’s operating loss per EV sold in the last quarter was nearly $37,000. The company has projected a full-year loss of $4.5 billion for its Ford Model e unit.
FORD, GM, MERCEDES COME CLEAN ON EV DEMAND WEAKNESS
Despite the decline, Ford reported revenue of $44 billion in the third quarter, an 11% increase, and a $1.2 billion profit. This is compared to a $827 million loss in the same quarter last year.
The company has warned of ongoing challenges in the EV market as customers hesitate to pay a premium for EVs over other vehicle models.
During the company’s earnings call, CEO Jim Farley acknowledged the “affordability issue” for customers when it comes to EVs.
Ford plans to reduce production of its Mustang Mach-E and scale back $12 billion in investments in its EV division. This includes a delay in the construction of a second battery plant in Kentucky.
Original article source: Ford stock plunges 12% on news of wider EV losses
