Ford's business will gradually transition from its internal combustion vehicles to battery electric vehicles, but combustion vehicles will continue to grow for the next few years, CFO John Lawler told Cheddar News.
"Over time, we do see the transition between internal combustion engines — gas vehicles — to [battery electric vehicles] but that's going to be over time," he said. "We still see growth for [internal combustion engine] businesses over the next few years."
That optimism comes in spite of a $2.1 billion loss that Ford's electric vehicle division reported in 2022. The company anticipates the segment will lose an additional $3 billion in 2023, as it works toward profitability in 2026.
Lawler joined "Wake Up with Cheddar" after the automaker announced a major change in the way it reports financials. Instead of reporting geographic results, the new format will break out financials for three customer-facing groups. "Ford Blue" will include its traditional gasoline, diesel, and hybrid vehicles like the F-150 and Mustang. "Ford Model E" includes all electric vehicles, and "Ford Pro" includes commercial vehicles and fleets. The company is framing this shift as a whole new Ford.
"What we've done in creating Ford Blue, Ford Model E, and Ford Pro is far more than an accounting exercise. After 120 years, we've essentially refounded Ford," Lawler said on a call with the press on Wednesday evening.
Following the change, Ford also reviewed what 2021 and 2022 financials would have looked like in the new format. Whereas the Model E segment lost about $2.1 billion, Ford Blue and Ford Pro brought in $6.8 billion and $3.2 billion, respectively.
Lawler justified Model E's losses as par for the course for electric vehicles, describing the segment as a "startup that was buried inside of Ford Motor Company."
"Like all electric vehicle startups, you lose money at first as you're building scale, as you're designing your products, as you're growing and building share," he said.
The company's path to achieving 8 percent EBIT margin by 2026 in the Model E segment will be facilitated by scale and design efficiency for things like batteries, Lawler said. The company also plans to shave about $3 billion in structural costs from the company's balance sheet by 2026. Lawler said reducing design complexity and increasing reuse and commonality would be "some of the main levers" to cut those costs.
Ford was one of the biggest producers of electric vehicles in 2022, second only to Tesla. In spite of all the buzz around EVs, Lawler emphasized that Ford is still focusing on all three of its segments.
"Right now all three businesses are growth businesses," he said.
There are now over 1,000 plant-based restaurants in the U.S. It's clear that people are hungry for vegan alternatives at restaurants nationwide. However, when it comes to pizza, vegan options don't have the best reputation. NUMU Food Group is looking to change that with its brand new vegan mozzarella. Mike Pytlinski, CEO of NUMU Food Group, joins Cheddar News to discuss.
Tattoo artist Katrina "Kat Tat" Jackson, famous for starring in the VH1 hit series "Black Ink Crew: Chicago," is also the first Black woman to own a tattoo shop in Beverly Hills. She joined Cheddar News to discuss her trailblazing work, the stigma BIPOC tattoo artists face in the industry, and the way the space has changed for artists of color since her start. "In the beginning, I remember walking into a tattoo shop just like, hey, I wanna learn, I wanna be a tattoo artist and kind of just being laughed at, not taken seriously," she said. "Even with the tattoo conventions, a lot of African American tattoo artists were almost scared to go to conventions because it's not a welcoming environment."
Jack Miller, Head of Trading at Baird, joined Closing Bell to break down how the Securities and Exchange Commission's proposals would change the landscape for individual investors, as they face stiff opposition from brokerages like Robinhood.
Robotics automation technology company Symbotic made its market debut on the Nasdaq via a SPAC merger with SVF Investment Corp. 3, a special purpose acquisition company sponsored by an affiliate of SoftBank Investment Advisers. Symbotic rang the Opening Bell at the Nasdaq to celebrate the occasion this morning. Its debut on Wall Street comes amid an urgent need for logistics solutions, as it aims to reimagine supply chains with its A.I.-powered robotic and software platform. Tom Earnst, CFO of Symbotic, and Vikas Parekh, managing partner at Softbank Investment Advisors, join Cheddar News' Closing Bell to discuss.
Michelle Castillo joined Closing Bell to break down Elon Musk's announcement to SpaceX employees that the Starlink internet business might not see itself as an IPO until 2025, Twitter planning to hand over the user data he requested as a condition of the acquisition, and Warren Buffet-backed Chinese EV company BYD stating it will be supplying batteries to Tesla "very soon."
At the age of 65, Judy Katz, who ran her own public relations firm for years, was looking for a change. After retirement, she started a brand-new business as an author and ghostwriter of books. Judy Katz joins Jamie Hopkins to discuss finding a new beginning as a ghostwriter and living life to the fullest post-retirement.
