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Ford Model e losing billions as it says EV unit should be seen as startup

DETROIT — Ford Motor Co.'s electric vehicle business has lost $3 billion before taxes during the past two years and will lose a similar amount this year as the company invests heavily in the new technology. The figures were released Thursday as Ford rolled out a new way of reporting financial results. The new business structure separates electric vehicles, the profitable internal combustion and commercial vehicle operations into three operating units. Company officials said the electric vehicle unit, called “Ford Model e,” will be profitable before taxes by late 2026 with an 8% pretax profit margin. But they wouldn't say exactly when it's expected to start making money. Chief Financial Officer John Lawler said Model e should be viewed as a startup company within Ford. “As everyone knows, EV startups lose money while they invest in capability, develop knowledge, build (sales) volume and gain (market) share,” he said. Model e, he said, is working on second- and even third-generation electric vehicles. It currently offers three EVs for sale in the U.S.: the Mustang Mach E SUV, the F-150 Lightning pickup and an electric Transit commercial van. The new corporate reporting system, Lawler said, is designed to give investors more transparency than the old system of reporting results by geographic regions. The automaker calculated earnings for each of the three units during the past two calendar years. Model e had pretax losses of $900 million in 2021 and $2.1 billion last year, and it is expected to lose $3 billion this year. In the past two years Ford has announced it would build four new battery factories and a new vehicle assembly plant as well as spending heavily to acquire raw materials to build electric vehicles. By the end of this year, the company based in Dearborn, Michigan, expects to be building electric vehicles at a rate of 600,000 per year, reaching a rate of 2 million per year by the end of 2026. Ford Blue, the unit that sells internal combustion and gas-electric hybrid vehicles, made just over $10 billion before taxes during the last two years. Ford Pro, the commercial vehicle unit, made $5.9 billion during those years, the company said. For this year, Ford expects Ford Blue to post a $7 billion pretax profit, modestly better than last year. Ford Pro is expected to earn $6 billion before taxes, nearly double its earnings last year, Lawler said. Ford was to present the new structure, announced last March, to analysts and investors on Thursday.

New 2020 Ford Explorer, Lincoln Aviator recalled for minor safety issues

Ford has announced a small recall on 2020 Explorers and 2020 Lincoln Aviators. Select units might be missing a manual park release cover, while others might have instrument clusters stuck in Factory Mode. The recall affects 14,135 SUVs in total.  While a vehicle is in production in a manufacturing facility, Ford might put them in what is known as Factory Mode to help reduce battery drain. Affecting the instrument cluster, this mode disables warning alerts, warning chimes, and does not show the PRNDL gear selector display. Ford says one vehicle was in an accident at a production facility as a result of the issue, but nobody was injured.  Separately, Ford found that some of these Explorers and Aviators might be lacking a manual park release cover. Federal Motor Vehicle Safety Standards require a manual park release cover that is only removable with a tool. Without the cover, there is a very minor chance the manual park release could be accidentally actuated, which could allow the vehicle to move on its own.  The recalls affect 13,896 vehicles in the U.S. and 239 in Canada. The Explorers were built between March 27, 2019, and July 24, 2019. The Aviators were built between April 10, 2019, and July 24, 2019. Owners can use Ford's recall number 19C06, and if affected, can take their vehicles in for fixes.

Lincoln dons the Black Label

"We're really trying to simplify for the customer on their terms." - Paul Bucek
Lincoln is launching a Black Label service and customization program in December at 32 dealerships across the country in a bid to attract new and more upscale customers.