Ford loses billions on EVs, despite government subsidies
Report: Ford Motor Company will lose $5B in two years on electric vehicles
From the sticker price to the charging stations, the electric vehicle is heavily subsidized by state and federal governments in America.
Despite the massive government support for EVs, which includes a $7,500 federal tax credit for most purchases, Ford Motor Co. expects to lose $3 billion on electric vehicles this year, according to news reports.
“The company forecasts increased profits from its internal-combustion and commercial business, while losses from EV sales continue to grow,” per a report in Car and Driver.
Last year, Michigan lawmakers gave Ford $100 million to hire 3,030 factory workers to build EVs. Two months later, the company laid off 3,000 white-collar workers, mostly from Michigan.
Ford is doubling down on electric vehicles that cost it billions, allowing EVs to eat into profits from the internal combustion division. Last year the EV division at Ford lost $2.1 billion, according to Car and Driver. That’s $5 billion of losses in two years.
“We’ve basically ‘refounded’ Ford,” chief financial officer John Lawler said on a recent earnings call.
EVs face a favorable environment among government officials in Michigan and Washington.
The state of Michigan has launched a whole-of-government effort to ensure there are two million EVs on Michigan roads by 2030. This goal comes despite a modest starting point: Michigan had only 17,500 EVs registered in 2021.
Gov. Gretchen Whitmer has sought $2,000 state rebates for EV buyers in the past, and her 2024 budget requests $113 million to spur demand for electric vehicles.
Most of it, $65 million, would be used to build EV charging stations. The remaining $48 million would subsidize sales taxes for EV buyers in Michigan for two years.
The federal government, meanwhile, will contribute another $110 million through fiscal year 2026. This will be used to build 127 EV charging stations here.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.