Detroit 3’s EV growing pains temper big Q2 profits

The automaker now expects EV production to hit an annual run rate of 600,000 sometime in 2024, after previously saying it would do so this year. Ford also backed away from its forecast of producing 2 million EVs annually by 2026.

Lawler told analysts that Ford no longer expects its first-generation EVs to have a breakeven contribution margin by the end of this year, although its longer-term profit goal remains the same: 8 percent margins in 2026.

“While the path to sustainable profitability may not look quite the same as we’ve previously thought, we’re confident in our ability to deliver through more efficient product design, cost efficiencies and growth in software and services, which will continue to accelerate,” Lawler said on a call with analysts.

Ford in recent months has slashed prices on its Mustang Mach-E crossover and F-150 Lightning pickup as EV inventories across the industry rise because production has outstripped demand.

Still, Ford CEO Jim Farley said the company sees strong EV purchase consideration among potential buyers.

“There are plenty of customers,” Farley said. “The issue is the price they’re willing to pay has come down.”

It’s an abrupt about-face for Farley, who previously called price cuts a “worrying trend” that risks commoditizing products and angering customers.

The price actions and production delays come roughly two months after Ford gathered analysts at its Dearborn, Mich., headquarters for a capital markets presentation detailing how it planned to make money off EVs.

“We credit Ford admitting to the EV demand and economic realities,” Wells Fargo analyst Colin Langan said in an investor note. “However, the timing is surprising following May’s EV focused investor day.”