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.
The one-hour special 'Cannabiz: Legalization Goes Mainstream' explores the state of marijuana. Cheddar News is joined by Rep. Earl Blumenauer (D-OR), Village CEO Dan Pettigrew, and many more.
Bitcoin is still struggling to hold $47,000 and is well off from the near $68,000 high it saw in November. As the Federal Open Market Committee wraps up its two-day monetary policy meeting, some crypto investors are worried as they wait for news on policy. Shiv Madan, CEO of Moonwalk joins Cheddar News to discuss what's in store for the industry.
We're entering a brave new world of broadly legal sports betting. Over 30 states and Washington, DC, have legalized sports betting in the year and a half since the supreme court struck down the federal ban on the activity.
But legalization isn't a simple proposition. The federal law might be struck down but its still up to each state to decide whether to legalize sports betting, and answer a litany of questions that come with it. Should you include online gambling? How much should people be allowed to bet? Should there be limits on advertising for sports betting?
Darren Heitner, founder of Heitner Legal, and Daniel Wallach, founder of Wallach Legal, join None of the Above's "Business of Sports: The Year Gambling Took Over" special to discuss.
Over the past decade, the resale market has completely transformed, allowing people to utilize platforms such as Etsy, Poshmark, eBay, and more to create a lucrative business from the comfort of their homes. However, as the space of secondhand sellers and thrifters gets more and more crowded, small businesses are facing bigger obstacles to not only thrive in the market but also survive. Yvette Liebesman, a law professor at Saint Louis, joins Cheddar News to discuss.
Even as tech giant Google implements a vaccination mandate, charging its employees to declare their vaccine status within a time frame or risk dismissal, the federal government is tangled up in the court system trying to impose one of its own. Cindy Cohn, the executive director of the Electronic Frontier Foundation, and Harry Nelson, founder and managing partner of Nelson Hardiman LLP, joined Cheddar to debate the ethics, efficacy, and legality surrounding the issue. While Cohn noted that she thinks the federal mandate might be legally sound, her organization is also concerned with a separate question of privacy. "At EFF what we're most interested in is the digital surveillance that's going along with some of these attempts to try to track and confirm whether people are vaccinated or not," she said.
A new report from CNBC says Instagram recently reached a new milestone -- 2 billion monthly active users. It comes amid a year of controversy for the photo-sharing app and its parent company, Meta. SocialFlow CEO Jim Anderson joins Cheddar News' Closing Bell to discuss.
A report from KPMG International found that global mergers and acquisitions in 2021 reached $5.1 trillion in transactions. Carol Streicher, U.S. deal advisory and strategy service group leader for KPMG, joined Cheddar's "Closing Bell" to talk about the record-breaking year and next year's outlook, which KPMG says could be even more staggering. "We're not seeing any slow down in '22," she said, regarding survey results of 350 business leaders. "Things that were tailwinds for us in M&A activity this past year are going to continue to be tailwinds for us in 2022."
