In response to a recent post on Twitter that compared Ford’s net EV income (minus-40%) and projected net EV income (minus-20%) to Tesla’s net margin (plus-11.4%), Musk said: “Always tough with margins for new vehicle lines, especially when there are major technology shifts. I think Ford’s overall strategy with EVs is smart. The electric F-150 (Lightning) has high demand.”
Ford had planned to manufacture 600,000 EVs by the end of 2023 but in July pushed back that timeline to 2024. Musk’s comments did come before the delay, but the companies have a mutual respect and have even signed a charger deal.
The No. 2-ranked EV brand in the United States, Ford in the last three years has debuted the Mustang Mach-E and F-150 Lightning to much fanfare.
The company’s transition from gas-powered vehicles to electric ones is important in driving down emissions, as rising global temperatures must be kept to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels “to substantially reduce the probability of extreme drought, precipitation deficits, and risks associated with water availability (i.e., water stress) in some regions,” among other hazards, according to the Intergovernmental Panel on Climate Change.
EVs can make a big impact as part of that undertaking — which includes the United States’ goal to reach net-zero emissions by 2050 — but manufacturers likely won’t continue to invest in such products if they don’t make money as well.
“While virtually all legacy automakers have started on a path to switch to electric vehicles, most of them struggle to make money selling them,” Electrek reported. Ford expects its EV business to lose $4.5 billion this year, viewing it more as an investment for the future.
Transportation is the United States’ largest greenhouse gas-emitting sector, but “driving an EV instead of a gas-powered vehicle … cuts your climate pollution by about two-thirds over your car’s life span,” according to the Natural Resources Defense Council.
GreenCars noted EVs emit 4,100 pounds of carbon dioxide equivalent per year (inclusive of production, processing, and ongoing electricity power sources) compared to 11,435 pounds for traditional gasoline vehicles. A recent study showed EVs have already had a positive effect in California, improving air quality and leading to fewer asthma-related hospital visits.
Another study from this year evaluated the potential impact of large-scale EV adoption within 30 metropolitan areas in the U.S. For example, EVs by 2050 will annually prevent 1,163 premature deaths in Los Angeles, saving citizens $12.6 billion in aggregate health care costs.
“Ford is investing more than $50 billion in electric vehicles globally through 2026 to develop breakthrough EVs,” the company stated on its website. “… Ford, as of summer 2022, had already secured 100% of the annual battery cell capacity needed to support the 2023 target and 70% needed to support the 2026 target [of 2 million EVs manufactured globally].”
Even though those objectives have been pushed back, Ford CEO Jim Farley is still optimistic.
“The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford,” he stated. “While others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away.”
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