05.03.2023
Ford Q1 earnings are out.
$41.5B revenue, 9% more overall deliveries than Q1 2022 (the peak of the Chip shortage), $1.8B Net income, up YOY from $3.1B loss in Q1 2022, mostly due to their then 12% Rivian holdings crash. Ford is still guiding for $9-11B net income overall in 2023.
Ford sold out of nearly all Rivian shares during 2022.
From EV's alone (called now "Ford Model E" in Earnings) Ford made a $700m revenue and lost $722M dollars.
Ford reported $0.9B losses from EV in 2021, $2.1B losses in 2022 and expected $3B losses from EV in 2023.
Ford sold less than 11k EV's in the US in Q1, which is $64k ASP per car, which makes sense since the lightning sells at around $80k average and they sold 4300, while the Mach-E average ASP is around $55k and they sold 5500, they also sold 1200 E-transit Commercial vans in Q1.
Their EV production run rate stated goals were...
- 150k Lightning run rate by end of 2023.
- 600k EV's run rate by end of 2023.
270,000 Ford Mustang Mach-E crossovers.
150,000 Ford F-150 Lightning pickups.
150,000 E-Transit vans.
30,000 - MEB platform vehicles (made by VW)
- 2m EV's in 2026.
Current Q1 annual run rate is 130k for total EV's, 52k for Lightning, 65k for Mach-E and 14k for E-transit.
Ford also believe they could turn current (-102%) EV negative profit margin to a break even by end of 2023 and 8% profit margin from EV by 2026, and still making 10% margin overall, which requires ICE to be more profitable then it is today which is extremely doubtful to say the least.
I seriously doubt this production rate and Break even for EV.
Ford also just announced today $3k-$4k price cuts on Mach-E, after they lost half the Rebate this month.
For known reasons and excuses, which I discussed in length in past posts, Ford is not yet ramping Mach-E production much more than 3800 it produced and sold on the first month of production in January 2021, over 2 years ago.
Same thing with Lightning, No more than 2000-3000 Trucks per month since June 2022, when sales began. The average number of lightning sold in 2022 was 2200 per month in 7 full months. In 2023 Q1, they sold 1230 per month on average.
In April production was nearly all shut down for repairs.
In Q1 2023:
- 259k EV's sold in the US, 7.2% of total cars sold, up 45% YoY, up from 5.8% total 2022.
- Tesla sold 162k EV's in the US in Q1, 62.4% EV market share.
- GM moved to #2 with 20.7k EV's, 19.7k Bolts, 968 Cadillac lyric EV and 2! Hummer EV's in Q1.
Tesla was there too at negative margins a few years ago at - negative 15% operating margin in 2017, 2% in 2018, crossed 0% in 2019, +6% in 2020, +12% in 2021, +17% in 2022.
This sounds like a very, very ambitious goal from less than 100k annually to 2m,. 20x in 4 years.
I guess if Tesla plans to grow from 1.3m in 2022 to 20m in 2030, 15x in 8 years and they did actually go from 22k in 2013 to 936k in 2021, 42x in 8 years, Ford can surely do it.
Given enough time, financial leverage and government support, some legacy Auto companies will pull through, some will not, but financial pain is inevitable.
The question remains...
- will they hit these ambitious production goals in time.
- will they hit these margin targets too.
- will the Blue and Pro and Credit be able to continue supporting the huge losses until then, or would they fall back into losses from failed loans due to high interest rates, other Macro economic pressure, reduced car prices after 2 years of inflated prices, EV competition eating market share, own EV Osborne effect, eating own market share.
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