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Recently, Ford announced its results for the first quarter of 2023, which showed that Ford's revenue in the first quarter was 41.5 billion US dollars, up 20% from the same period last year. First-quarter net profit was $1.8 billion, a turnround from a year earlier, when the net loss was $3.1 billion. It is worth noting that the financial report also revealed that Ford's electric vehicles and digital business unit, Ford Model e, lost $700 million before interest and tax in the first quarter. Based on Ford's total Model e sales of 12000 in the first quarter, it is not difficult to calculate that Ford will lose $58000 (about 401000 yuan) for every electric car it sells.

Relevant data show that: in order to accelerate the pace of Ford's electric transformation, Ford split the traditional fuel vehicle and electric vehicle business, dividing Ford's automobile manufacturing business into two. Among them, the fuel vehicle business is called "Ford Blue" and the electric vehicle business is called "Ford Model e", which is led by different teams and the financial statements will be separated. Ford Blue specializes in producing traditional fuel engines for sports utility vehicles such as the Bronco, while Ford Model e is in charge of electric vehicles and digital operations. Ford CEO Jim Farley has said he intends to turn Ford Blue into the company's profit and cash engine to fund the expansion of the electric vehicle business.

The loss on Ford Model e may have something to do with the current price war and the earlier production standstill at Ford's Cuatitland plant in Mexico. It is understood that the Ford Mustang Mach-E is the first pure electric model of the Ford Electric vehicle Division, which is produced by Changan Ford. It will be officially listed on April 23, 2021, with a price range of 24.99-369900 yuan. After Tesla announced price cuts in China in October last year, Ford also cut the prices of some of its Mustang Mach-E models, ranging from 20000 yuan to 28000 yuan. Among them, the Yueshi rear drive version (standard battery life) dropped to 249900 yuan, a decrease of 26000 yuan; the boundless rear drive deluxe version dropped to 288900 yuan, a drop of 28000 yuan; in addition, the price of the wind-chasing all-drive luxury version (long-range) and GT both reduced by 20000 yuan. According to relevant data, Ford Electric Horse sold only 6080 vehicles in 2022. Compared with other new energy vehicle products, the performance of Ford Mustang Mach-E in the market is not satisfactory.

In the US, sales of Mustang Mach-E electric vehicles have also declined recently, with figures showing that Mach-E sales in the US fell 20 per cent year-on-year to 6614 in the first quarter of this year. On May 2nd, Ford again announced a price cut for the Mustang Mach-E electric car and reopened its order. It is understood that the price reduction of several versions of Mach-E ranges from $3000 to $4000, with a maximum reduction of 7.8 per cent. The price of the rear wheel drive version of the Mach-E Premium, for example, was reduced from $50995 to $46995.

However, with regard to the price war between car companies, Jim Farley, CEO of Ford Motor Company, said recently: price war is a worrying trend and will not indefinitely lower the price of electric vehicles to compete with Tesla. Earlier, Marin Gjaja, chief customer officer of Ford's electric vehicle division, had also said that Ford was working to improve the profit margin of Mach-E. Sales of Mustang Mach-E electric vehicles have also been affected by a production halt at Ford's Cuatilan plant in Mexico. But officials have said the pause is aimed at increasing factory capacity and plans to reach 210000 vehicles a year by the end of 2023.

Ford has long predicted losses in its electric vehicle business. Model e, its electric vehicle business, expects to lose $3 billion this year, and Ford Model e will lose $6 billion over three years from 2021 to 2023, including an estimated loss of $2.1 billion last year, Ford said at a briefing for investors and analysts on March 23. But at the same time, Ford also pointed out that its first-generation electric vehicles, including the Fmur150 Lightning and Mustang Mach E, are expected to be profitable by the end of 2024.

In fact, it is not difficult to see from Ford's projected losses that Ford's entry into the electric car market is a long-term strategy. Ford CEO Jim Farley also revealed changes to his China strategy at the earnings conference, saying that the China market strategy would change, reducing investment, streamlining and focusing on high-return businesses. In the face of difficulties in the Chinese market, Ford chose not to try to serve everyone, and the new plan will focus more on commercial vehicles, Ford's profitable business in China. Ford also plans to use its Chinese plant as an export base for economical electric vehicles and fuel commercial vehicles.

According to Ford's official strategic plan, Ford plans to produce more than 2 million electric vehicles worldwide in 2026, accounting for 50 per cent of electric vehicle sales in 2030. However, in the face of increasingly competitive smart electric vehicle products in the Chinese market, Ford China continues to deepen the research and development and operation of intelligent electric vehicles in the Chinese market, but how to speed up the speed of electrification and increase the sales of electric vehicles? this is a big difficulty.

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