Ford gave Joe Biden some bad news about electric vehicles that sent him into a rage

May 17, 2024

Joe Biden’s electric vehicle revolution isn’t working out as he planned. 

Now automakers are having to face the grim reality about the market for them.

And Ford gave Joe Biden some bad news about electric vehicles that sent him into a rage.

Ford cuts battery orders for electric vehicles as losses grow

The demand for electric vehicles is cratering and that’s forcing automakers to reassess their plans.

Ford was one of the automakers that made a big bet on President Joe Biden’s ambitious electric vehicle agenda.

But slumping sales and heavy losses are forcing them to painful cutbacks.

Ford announced that it was cutting back on battery orders for electric vehicles from its suppliers in South Korea and China.

The Detroit automaker sources its batteries from South Korea’s SK On Co. and LG Energy Solution Ltd. along with Contemporary Amperex Technology Co. Ltd., a company with links to the Communist Chinese Party (CCP).

This is the latest cutback to Ford’s electric vehicle division.

Weak demand has caused the automaker to cut $12 billion on its electric lineup, pause plans to build a battery in Kentucky, postpone new models, and slash prices to mode inventory.

Ford’s electric division is bleeding the automaker dry

Ford Chief Executive Officer Jim Farley admitted its electric division, Model e, “is the main drag on the whole company right now.”

Model e is projected to lose $5.5 billion this year and the automaker doesn’t sell a single electric model at a profit.

Ford is now losing well over $100,000 on every electric vehicle sold.

These heavy losses raise questions about the viability of the entire sector.

Biden has showered Ford with taxpayer-provided subsidies to boost its electric division and given buyers a $7,500 federal tax credit to stimulate sales.

But Ford still can’t turn a profit on electric vehicles and buyers don’t want them with the government propping the industry up.

Bloomberg Intelligence estimated that the losses on Ford’s electric division will nearly erase the profits from its Ford Blue division which produces traditional gasoline and diesel-powered vehicles.

“That raises questions about the prudence of investing heavily in EVs,” Bloomberg Intelligence analysts Steve Man and Peter Lau wrote.

Ford is scrambling to cut costs in a bid to make its electric division profitable.

But they’ve also had to drop prices on electric vehicles to follow suit with Tesla and other competitors who’ve cut prices to boost sales.

“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,” Ford chief financial officer John Lawler said on an April earnings call. “But we’re targeting to take out as much cost this year as we can on Model e and all in the spirit of driving toward that contribution margin positive.”

Lawler was recently promoted to try and solve the automaker’s electric vehicle woes.

He said the massive losses in Ford’s electric vehicle division can’t go on forever.

“Model e has to stand on its own,” Lawler said. “It needs to be profitable and it has to provide a return on the capital we’re investing.”

There appears to be no light at the end of the tunnel for Ford’s electric vehicle nightmare.

24/7 Politics will keep you up-to-date on any developments to this ongoing story.

 

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