Ford’s ballooning EV losses indicate legacy automakers still struggling to compete

Ford’s (NYSE:F) latest quarterly results offered another sign that legacy automakers are still struggling to make inroads into the electric vehicle (EV) industry, which has become flooded with a slew of competitors largely from Chinese manufacturers.

Dearborn, Mich.-based Ford (F) on Monday announced Q3 results. It recorded an EBIT loss of $1.2B on its EVs, and its cumulative EBIT losses for the year swelled to $3.7B.

“No doubt there’s a global price war and it’s fueled by over capacity, a flood of new EV nameplates, and massive compliance pressure,” top boss Jim Farley said in the earnings conference call.

“Since Q1 of last year, EV volumes have grown 35% while revenues in total are flat at $14B. That means the progress on volume has been fully offset by prices,” the chief executive expanded.

“We’re expecting roughly 150 new EV nameplates to hit North America by the end of 2026. And some are competitors are already resorting to very aggressive lease tactics, even on the brand new products, which creates huge residual risk and overhang and brand damage,” Farley added.

On Thursday, multiple media reports said Ford (F) was planning to idle production of its F-150 Lightning electric truck until early 2025.

Ford (F) has had to take tough steps to cut its costs in EVs. Earlier this year, the automaker pushed back the expected launch of its all-new three-row EVs to 2027 from 2025.

Ford (F) CEO Farley a week before the quarterly report drew some attention after his appearance on the Fully Charged podcast, on which he said he drives an EV model by Chinese firm Xiaomi.

“I try to drive everything we compete against. Have done it my whole career. Specs can tell part of a story, but you’ve got to get behind the wheel to truly understand and beat the competition,” Farley had later said on X (formerly Twitter).

Ford’s (F) closest Detroit peer, General Motors (GM), is also dealing with an anemic EV division. Meanwhile, there is talk that European rival Volkswagen (OTCPK:VWAGY) might close German plants for the first time in its history. Volkswagen (OTCPK:VWAGY) also delivered quarterly results this week, reporting a steep plunge in profit.

Farley on the earnings conference call said Ford (F) is squarely focused on cost.

“We’ve already reduced $1B in our EV costs this year. We remade our battery footprint. We trimmed our capacity by 35% in line with where we think the market will be in a few years. We accelerated the mix of our batteries, emphasizing LFP, we’ll be the first one to manufacture in the U.S., and that battery will leverage the IRA production tax credit,” Farley said.

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