Ford Pulls Full-Year Forecast Due to Union Contract
Reports expanded pullback of EV production in third-quarter report.
Ford said many North American consumers resist paying more for EVs than gas-powered models or hybrids, 'sharply compressing EV prices and profitability.'
IMAGE: Ford
Ford in its third-quarter report Thursday withdrew full-year earnings guidance due to its pending new contract with the United Auto Workers, while also reporting more deceleration of its electric-vehicle business.
The automaker said wholesale deliveries of its first-generation EVs rose 44% in the quarter and that revenue increased 26%. But the unit's earnings before interest and taxes sustained a $1.3 billion loss, more than in the second quarter, which it attributed to investment in new EV models and “challenging market dynamics.”
Ford said many North American consumers resist paying more for EVs than gas-powered models or hybrids, “sharply compressing EV prices and profitability."
“Ford is able to balance production of gas, hybrid and electric vehicles to match the speed of EV adoption in a way that others can’t,” said CFO John Lawler in a press release. “That’s obviously good for customers, who get the products they want – and good for us, too, because disciplined capital allocation and not chasing scale at all costs maximizes profitability and cash flow.”
U.S. EV market leader Tesla has sacrificed revenue for volume this year with a series of price cuts, and Ford and others followed with their own EV price cuts.
Overall, Ford’s quarterly revenue rose 11% year-over-year to $44 billion. Its adjusted EBIT totaled $2.2 billion and so far this year is at $9.4 billion; it earlier forecast up to $12 billion for the full year but withdrew that due to the impact of the pending union contract, which includes 25% worker pay raises.
Originally posted on Auto Dealer Today
More Industry
Structure Leads to Optimized Auto Listings
As the average car-buying journey has shifted to a blend of digital and retail, a dealership’s vehicle listings must be optimized to answer shoppers’ questions clearly and accurately.
Read More →
Consumers Mixed on Economy, Finances
A July survey shows spotty sentiment of current and future conditions, in addition to demographic differences as overall opinion of present circumstances kept sliding.
Read More →
EVs Closing the European Gap
Electrified powertrains led June new-vehicle sales in Europe, reaching 26% of the market.
Read More →
Early Intervention Saves Retention
Sales and service departments have the highest annual dealership turnover rates, according to a new industry report, costing money and time that could be better spent elsewhere.
Read More →
Autos More Appealing
Consumers gave new cars better scores again this year for design, performance and more as mass-market brands kept gaining on premium lineups, JD Power found in an annual poll.
Read More →
Used EVs Defy Overall Market
While the used-car market saw three months of price declines or stagnation, the used EV segment did the opposite – rising for three straight months.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Gone to the Dogs
A Stellantis brand decided to have some fun with one of its SUVs’ design to address growing emphasis on family pets.
Read More →
OEM Poll Sees Industry Evolution
Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.
Read More →
Luxe N.C. Dealerships Change Hands
A collection of Italian and English brand franchises were handed off to the owner’s friend in the business and include the Carolinas’ only Ferrari retail stores.
Read More →