Affordable? – Ford’s Recent Decisions
Ford was one of the best comeback stories due to the emergence of the EV market and the new leadership of Jim Farley, with the Lightning becoming a major hit among consumers. Ever since then, the hype has died down a little as Ford is facing some issues, and they are making some changes that show how much progress needs to be made for them to be a major force in the industry.
In order to be more transparent with the public and receive insights into company performance, Ford is reporting their results in three different segments: Model e for the EV business, Ford Blue for the traditional business that sells internal-combustion-engine-vehicles, and Ford Pro for the commercial vehicles. When it comes to Ford Model e, the company announced in a statement that they expect to lose $3 billion in the segment, an increase from the $2.1 billion loss last year. Finance chief John Lawler said to think of the segment as a startup company, where money is burned early in order to grow quickly and gain share in the market, and that is a fair point given Tesla went through this to develop the company before continuously posting profits. Ford expects to start to reach its targets around 2026 as they continue to navigate through the investment process in their long-term EV project. This is where Ford’s decision to stray away from regional results and go ahead with reporting earnings by segment will be extremely helpful for investors to track progress and keep Ford accountable.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.