Setbacks in the Electric Vehicle Eegment for Ford
Traditional vehicle segments offset losses and generate profits

The electric vehicle business of Ford continues to face significant challenges. The US automotive giant reported substantial losses in its electric vehicle division in the past quarter, with an operating deficit of $1.3 billion. This loss is well above the $717 million recorded in the same quarter of the previous year.
While the electric vehicle division is struggling, Ford's traditional combustion engine and commercial vehicle segments have saved the company. These segments generated operating profits of approximately $1.7 billion each. For the full year, Ford's revenue increased by eleven percent to nearly $44 billion. The bottom line showed a profit of $1.2 billion, a remarkable comeback from the $827 million loss in the previous year's quarter. However, these numbers fell short of analyst expectations, leading to a four percent drop in Ford's stock in after-hours trading.
Not only did the revenue of the electric vehicle division disappoint with the operating loss, but also with actual sales figures. In the third quarter, only 36,000 electric vehicles were sold, while sales of combustion and hybrid vehicles stood at an impressive 736,000 units.
Another blow to Ford was the recently concluded six-week strike that resulted in a tentative agreement with the US union UAW. The strike actions were historic as UAW called for work stoppages at the three major US automakers - Ford, GM, and Stellantis - for the first time. The final negotiation results still need to be ratified by union members, but the agreement includes a 25 percent wage increase over the duration of the labor contract.
Analysts estimate that the agreed-upon wage increases could burden Ford's fourth-quarter results with $800 to $850 million. Nevertheless, there is optimism that the agreement will help the stock as production resumes. In fact, the stock outlook for Ford and GM has been bleak lately, with sentiment reaching its lowest level in nearly ten years.
Despite the challenges, Ford CEO Jim Farley expressed optimism about the tentative agreement and emphasized Ford's focus on resuming production at its facilities. With the agreement, 20,000 employees are back to work, which is a step in the right direction for the automaker.
