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Any question of what business sector is — and is not — profitable at Ford is no longer a mystery.
Ford lost about $3 billion on its EV and digital services business over the past two years, a unit now known as Model e, and isn’t expected to be profitable (on an adjusted basis) until 2026, the company said Thursday. Meanwhile, its commercial and traditional internal combustion engine business units, were profitable enough to offset losses incurred by making and selling electric vehicles.
In other words, profits generated from selling internal combustion engine-powered trucks, cars and SUVs will help drive Ford’s push into EVs.
Ford lifted the hood Thursday on how the restructured 119-year-old company will operate and, importantly, report its financials. Earnings reports, which Ford restated for 2021 and 2022, will no longer be broken out by region. Instead, financial reports, which includes revenue, profits and losses, margins and adjusted earnings, will give details on three global segments business that covers EV and digital services, traditional internal combustion engine business and its commercial vehicles.
And while Lawler stressed to TechCrunch that this is not merely an accounting exercise, the numbers do provide fresh insight into the company’s financial standing.
Last March, Ford announced plans to restructure and break the company into three segments: Ford Blue for its internal combustion and hybrid vehicles, Ford Pro for the commercial business and Ford Model e, which covers electric vehicles, advanced driver assistance systems and digital services. The newly restructured company and its accompanying financials also break out Ford Credit, the company’s financing arm, corporate and Ford Next, which is where its longer-term pre-revenue businesses like the newly formed Latitude AI sit.
The upshot? For now, the EV and digital services business is unprofitable while the other two are gaining ground, on an adjusted earnings basis.
As a recap, Ford reported in February that on an adjusted basis it earned $10.4 billion for all of 2022. Ford’s net income on an adjusted earnings before interest and taxes in 2021 was $10 billion. On Thursday, Ford issued the restated earnings, which shows the Model e unit had losses of $900 million in 2021 and $2.1 billion in 2022.
Meanwhile, Ford Pro saw profits increase from $2.7 billion in 2021 to $3.2 billion in 2022. Ford Blue brought in the bulk of profits, earning $3.3 billion in 2021 and jumping to $6.8 billion in 2022.
The automaker forecast that its Ford Blue unit will earn, on an adjusted basis, $7 billion in profits in 2023. Ford Blue will approach $6 billion in profits, nearly double its 2022 earnings. And Model e, the EV and digital services unit, is forecast to lose $3 billion in 2023, a loss driven by a number of capital projects including building new factories such as the $5.6 billion BlueOval city complex in Tennessee.
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