Ford's Newest Problem Is Frightening

Winter is coming to the automotive industry. Except winter in this instance isn't the approaching weather, or zombies, it's the coming onslaught of highly subsidized, innovative, affordable, and well-received Chinese electric vehicles (EVs). Investors have likely heard about the U.S. planning its 100% tariff on imported Chinese EVs, but what you might not know is that the tariff may not matter, and that's a problem for many automakers, particularly Ford Motor Company (NYSE: F) -- here's why.

Much has been made of Ford's dive into the EV market. On one hand, the company's Mustang Mach-E, F-150 Lightning, and E-Transit have driven the company to the No. 2 spot in U.S. EV sales behind . On the other hand, it's also true that through the first half of 2024, the company has lost nearly $2.5 billion in its Model e division.

Furthermore, although Ford's EV sales spiked 61% during Q2 with nearly 24,000 EVs sold, Ford's Model e EBIT margin was a 99.5% loss for the second quarter. Ford has taken many steps to delay EVs, refocus on hybrids, cancel an upcoming line of EV SUVs, downsize battery plant plans, and ultimately has pushed back on roughly $12 billion of EV investments.

Continue reading

Source Fool.com