Bidenomics At Work: Ford Slashing Battery Orders As Losses Per EV Approach $100,000
Ford is cutting battery orders in yet another sign that the EV market, despite a constant tailwind from the U.S. taxpayer, is starting to slow.
The company is cutting the orders to curb electric-vehicle losses as it scales back its EV strategy in a slowing plug-in market, according to insiders who spoke to Bloomberg.
Ford CEO Jim Farley has said the company’s EV unit “is the main drag on the whole company right now” and CAT said its “cooperation with Ford is moving forward as normal”.
The company responded by saying it wouldn’t comment on relationships with suppliers.
Bloomberg notes that with plummeting EV prices and weakening demand, Ford’s losses per electric vehicle exceeded $100,000 in the first quarter, doubling last year’s deficit.
Bloomberg Intelligence estimates that Ford’s projected EV unit losses this year will nearly offset profits from its Ford Blue division, which produces traditional internal combustion engine vehicles like the Bronco SUV and gas-electric hybrids such as the Maverick truck.
BI analysts said of the results: “That raises questions about the prudence of investing heavily in EVs.”
Ford’s order reductions highlight industry challenges as U.S. automakers face weaker-than-expected EV demand and battery makers in South Korea, China, and beyond struggle with unsold inventory.
This has affected prices for key metals like lithium, cobalt, and nickel, leading to multiyear lows and stalling new projects. Ford has reduced EV production costs but had to cut prices to stay competitive with Tesla.
Ford CFO John Lawler said in April: “We’ve seen prices coming down quite dramatically and that’s why we haven’t been able to keep up from a cost reduction standpoint.”
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