Ford is the No. 2 vendor of electrical autos within the US. It’s very pleased with that truth, however the amount of money it needed to burn to get there is sufficient to make you wonder if it may possibly preserve that title.

The corporate reported its first quarter earnings final night time, and woo boy, it’s tough. Ford mentioned it misplaced $1.3 billion on the sale of 10,000 electrical autos within the first three months of the 12 months — a staggering determine that quantities to $130,000 misplaced for each EV bought.

Ford’s Mannequin e division, which oversees a few of the firm’s EV gross sales in addition to software program, reported $100 million in income, an 84 % drop from the identical interval final 12 months. The variety of autos bought (10,000) was additionally down from the primary quarter of 2023 by 20 %. Ford blamed “pricing stress” — principally pushed by Tesla’s rampant value cuts — and “slower progress” as clients have cooled on electrical autos.

To make sure, Ford Mannequin e doesn’t deal with all the corporate’s EV enterprise. Ford Professional, its business division, additionally sells electrical F-150 Lightning vans and E-Transit vans. Earlier this month, Ford mentioned it bought a cumulative 20,232 EVs through the first quarter, which was an 86 % enhance over Q1 2023 however a 22 % drop in comparison with the earlier quarter.

So what’s going to staunch the bleeding? For one, the corporate plans to spend lower than it beforehand mentioned it could — to the tune of $8 or $9 billion, relatively than $10 billion.

“We’ll in all probability be on the low finish of that vary,” Ford CEO Jim Farley mentioned in a name with buyers. “And we’re being very constant about our self-discipline on profitability.”

One other factor it says will assist carry its EV enterprise into stability is new applied sciences, like “new battery chemistry and codecs to considerably cut back the price of the batteries for that car.”

These embrace a lithium iron phosphate chemistry that Ford says is extra sturdy, sooner charging, and extra inexpensive than its present lineup of EVs, which largely depend on nickel cobalt manganese (NCM) chemistries.

Ford has been growing these new chemistries with China’s Modern Amperex Know-how Co., Restricted (CATL), a world producer of EV batteries — although the automaker pressured that it’s going to personal and function the plant outright by means of its wholly owned subsidiary and that the Chinese language firm will solely present “information and providers.” Preliminary manufacturing is predicted to start in 2026.

One other main guess is on Ford’s Silicon Valley-based skunkworks group, which is being led by ex-Tesla government Alan Clarke. These designers are engaged on a next-generation platform of smaller, extra inexpensive EVs, which Ford is betting will probably be a giant assist in profitable over city dwellers.

“We consider that’s the place the adoption of EV will develop the quickest,” Farley mentioned of metropolis residents. “And we consider we are able to compete in segments of small automobiles and autos, extra inexpensive autos in a singular manner that’s Ford.”

Remember, this is similar firm that discontinued all of its sedans and hatchbacks six years in the past in favor of constructing large SUVs and vans, concluding that bigger autos would drive larger revenue margins.

They did — and nonetheless do right now. Ford’s gas-guzzling SUVs (Escape, Explorer, Expedition, and Bronco) had a historic quarter, which the corporate is looking its “all-time finest.” The corporate bought 216,997 SUVs — up 15 % over final 12 months.

Sedans just like the Ford Focus, Fiesta, and Fusion have been cash losers — very like the Mustang Mach-E and F-150 Lightning are right now. For the corporate to say that smaller, extra inexpensive automobiles will probably be its salvation from future losses is slightly ironic.