Ford’s electric vehicle division, Model e, is showing significant signs of recovery. The division earned $1.2 billion in the first quarter of 2024, a massive 967% increase compared to the previous quarter, which saw just $0.1 billion in revenue. While losses remain, they have narrowed considerably, with an EBIT loss of $849 million—down from a staggering $1.3 billion in the same period last year.
Sales were a key factor in this improvement. Model e saw a 213% rise in sales, jumping from approximately 10,000 units to 31,000. However, sales were not the only factor driving this growth. Cost savings also played a role in improving the division’s financial performance.
Ford attributes the rise in sales to the recent launch of new electric vehicles in Europe, including the Capri and Explorer models, which are being produced in Cologne. In addition, the cost of materials has decreased, and vehicle prices have increased, further boosting earnings.
The company has emphasized that its focus for the year remains on improving profit margins and making disciplined investments in battery production and next-generation products. Ford’s goal is clear: to turn Model e into a more profitable and sustainable division.
For the company as a whole, the first quarter saw a slight dip in overall sales, which fell to $40.7 billion, a 5% decline year-on-year. The Blue combustion engine division generated $21 billion, while Ford Pro vans brought in $15.2 billion. Model e’s contribution was $1.2 billion. Ford’s adjusted EBIT dropped by 63% to $1 billion.
Looking ahead, Ford is concerned that U.S. tariff policies could make business even harder. The company predicts a negative adjusted EBIT impact of around $1.5 billion in 2025 due to potential tariff-related changes.
While the first-quarter figures for Model e are encouraging compared to last year, they must be understood in the context of the challenges Ford faced in early 2024. In the first quarter of 2024, Ford’s electric car sales plummeted by 84%, largely due to widespread price cuts aimed at clearing out inventory. Ford ultimately recorded a loss of $5.1 billion for the entire year, a figure even worse than in 2023.
At the time, Ford made leadership changes in Model e to address these issues. The company had warned in its 2024 annual review that 2025 would not see a significant turnaround. Its forecast suggested another loss in the range of $5 to $5.5 billion for the year.
In a separate development, Ford may be suspending its plans to develop its next-generation electronics architecture, known as FNV4. This software system, designed to be the “brain” of the company’s smart cars, had received substantial investment from Ford. If this program is officially discontinued, it is expected to have financial implications for the company in the near future.
