A Ford It is one of the largest automotive companies in the world, manufacturing various types of cars, from popular models to incredible modern and technological automobiles, and is widely known. Not only buyers recognize the greatness of the brand, but big businessmen also notice its enormity.
Recently, Elon Musk, CEO of Tesla, current owner of the social network Twitter and second richest man in the world, published on his profile a compliment to Ford, for its intelligent strategy related to EVs, or electric vehicles.
Check out the businessman’s post on twitter
Always tough with margins for new vehicle lines, especially when there are major technology shifts.
I think Ford’s overall strategy with EVs is smart.
The electric F-150 (Lightning) has high demand.
— Elon Musk (@elonmusk) May 3, 2023
“*HOLY SH9T* Ford $F, the company that was supposed to take over @Tesla, just revealed its *net* margin on electric vehicles.
Ford NET EV Income Today: *negative* 40%.
Ford’s PROJECTED EV Net Revenue: *negative* 20%.
Tesla’s net margin today: 11.4%.Great job @elonmusk & team.”
“Always difficult with margins for new vehicle lines, especially when there are major technology changes.
I think Ford’s overall strategy with EVs is smart.
The electric F-150 (Lightning) is in high demand.”
This is not the first time the billionaire has congratulated the automotive company. He has already spoken out twice, in 2019 and 2021, praising the launches of the Mustang Mach-E and the F-150 Lightning, respectively. The current post comes in a context that is not very favorable for Ford, hence its relevance.
Losses at Ford
Ford has announced a restructuring that could cost the company up to $2 billion, moving its top engineers from Asia and Europe to the United States, but that could lead to profitability from selling its electric cars.
The automaker is currently losing about 40% on every electric vehicle it sells. Musk said it is especially difficult to increase profit margins as technology advances, with his company, Tesla, which is also a vehicle manufacturer focused on EVs, having a gross margin of 15% to 25% on every car it sells, and a net margin of 10%.
With the restructuring, Ford intends to increase annual production of its EVs to 600,000 and reduce its losses to 20%.
Currently, the company has a steady demand for some of its vehicles, such as the Mach-E, the acclaimed Lightning and especially the E-Transit, but the Explorer EV will really be a great option for buyers, due to its autonomy of up to 540 km.
The Explorer EV is not expected to be sold in America, only in Europe and Asia.
