Why Elon Musk says Ford’s EV strategy is smart despite poor margins

Why Elon Musk says Ford’s EV strategy is smart despite poor margins


Tesla Inc TSLA CEO Elon Musk has praised Ford Motor Co‘S f Electric vehicle strategy although this segment saw a huge drop in sales and a collapse in margins.

What happened: “Ford’s overall EV strategy is smart,” Musk said. The Tesla CEO responded to a Twitter user who expressed shock at Ford’s huge negative EV net margins.

“Always difficult with margins for new vehicle lines, especially when there are big technology changes,” Musk replied. “Ford’s F-150 Lightning electric truck is in high demand.”

Why it matters: Ford said so on Wednesday First-quarter revenue increased 20% year over year to $41.5 billion, beating the consensus estimate of $36.03 billion Gasoline Pro.

The Ford Model e segment, which develops electric vehicles, saw sales fall 27% to $700 million. According to media reports, this segment had a profit margin of around minus 40% on an EBIT basis in 2022.

ford expects to increase manufacturing capacity to a global production rate of 600,000 EV units by the end of 2023 and maintains its 2023 guidance for adjusted EBIT in a range of $9 billion to $11 billion and adjusted free cash flow of approximately $6 billion US dollar fixed.

Former Ford CEO mark fields estimated Tesla after its investor day in March. “Tesla is just a generation ahead of the other automakers” he had said.

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Continue reading: Stellantis is bucking Tesla’s price-cutting frenzy to focus on profitability

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