Ford Motor Co (F.N) reported first-quarter earnings on Wednesday that surpassed analysts’ estimates, fueled by a robust performance in its commercial vehicle segment and an uptick in hybrid vehicle sales. The company expressed confidence in achieving the upper end of its annual earnings guidance range of $10 billion to $12 billion before interest and taxes. Following the announcement, Ford’s shares surged more than 3% in after-hours trading.
However, Ford continues to grapple with what CEO Jim Farley described as “a significant challenge not only for Ford but for our entire industry”: electric vehicle production. The automaker registered a $1.3 billion operating loss for its EV and software division in the first quarter. Looking ahead, executives anticipate this segment to incur a pre-tax loss ranging between $5 billion and $5.5 billion for the year.
In the short term, Ford is prioritizing hybrid vehicles as a transitional step towards an electrified future, aiming to boost hybrid sales by 40% this year and quadruple them in the coming years. Farley indicated a recalibration of Ford’s EV strategy to align more closely with consumer demand. As part of this adjustment, Ford postponed the launches of three-row EVs in Canada and its next-generation electric pickup truck manufactured in Tennessee. Executives emphasized the importance of profitability before launching new EV models.
Navigating the EV landscape has proven challenging not only for traditional automakers like Ford but also for dedicated EV manufacturers like Tesla (TSLA.O). Elon Musk’s company recently implemented a 10% reduction in its global workforce and reported a decline in quarterly revenue, marking its first decrease since the onset of the pandemic.
