The electric vehicle market continues to crash and burn.
Last week, it is being reported that Ford took a massive lost on each and every electric vehicle (EV) that it sold.
Ford’s electric vehicle unit reported that losses soared in the first quarter to $1.3 billion, or $132,000 for each of the 10,000 vehicles it sold in the first three months of the year, helping to drag down earnings for the company overall.Ford, like most automakers, has announced plans to shift from traditional gas-powered vehicles to EVs in coming years. But it is the only traditional automaker to break out results of its retail EV sales. And the results it reported Wednesday show another sign of the profit pressures on the EV business at Ford and other automakers.The EV unit, which Ford calls Model e, sold 10,000 vehicles in the quarter, down 20% from the number it sold a year earlier. And its revenue plunged 84% to about $100 million, which Ford attributed mostly to price cuts for EVs across the industry. That resulted in the $1.3 billion loss before interest and taxes (EBIT), and the massive per-vehicle loss in the Model e unit.The losses go far beyond the cost of building and selling those 10,000 cars, according to Ford. Instead the losses include hundreds of millions being spent on research and development of the next generation of EVs for Ford. Those investments are years away from paying off.
Furthermore, a new report finds electric vehicles depreciate much more rapidly than those with an internal combustion engine (ICE). And the drop is dramatic….10 times faster than traditional cars.
According to a recent study showing the average used car price for an EV fell nearly 32% in the past year, compared to the decline of 3.1% for gas power vehicles.Used electric vehicles are depreciating 10 times faster than their gas-powered counterparts, according to a new study from iSeeCars.com. The average price of a used electric vehicle plummeted 31.8% over the last 12 months, compared with a 3.6% decline overall.“Elon Musk’s initial price reductions on new Teslas were already impacting EV values a year ago,” iSeeCars Executive Analyst Karl Brauer said in a statement. “But his repeated price cuts kept pushing used Tesla prices down, which spread to all electric vehicles, creating weakness across the used EV market.”Last year, Tesla dropped the price on its standard Model 3 sedan by about 17% and its Model Y long-range version by about 26%. Last month, the company temporarily cut prices on two versions of its Model Y by another 2%.
Finally, I arrive at the news that brings be great joy: General Motors has just announced a big jump in profits for the first three months of the year, based on the strength of its gasoline vehicle business.
The company saw slow growth in electric vehicles, but robust sales of internal combustion vehicles, especially pickup trucks, helped raise its profit to $3 billion in the first quarter, a 24 percent jump from a year earlier. G.M. also said it now expected to make $10.1 billion to $11.5 billion in profit this year, up from a previous forecast of $9.8 billion to $11.2 billion.
Sadly, GM is going to continue with its EV plans. But I am heartened to see that “climate crisis” cultism is being ignored by the consumer.
As I have noted before, until there is a charging infrastructure network that can accommodate the entire American public, an electric grid that can handle capacity, enough natural resources to build models at a moderate price, and technology that doesn’t ignite when it gets wet or won’t start when it gets too cold, EV will remain a niche market.
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