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.
Just about a week after being re-nominated, Federal Reserve Chair Jermone Powell is changing his tune. After nearly a year of referring to inflation as 'transitory,' Powell said he will retire the 'T' word as inflation remains elevated. Christopher Russo, Post-Graduate Research Fellow, Mercatus Center joined Cheddar's Opening Bell to discuss.
With the delta variant, financial uncertainty, political polarization and more, companies have had to get creative in order to stay afloat this year. During times of stress and anxiety, consumers tend to stick with more established brands or products they already use. That sentiment is reflected in data intelligence company Morning Consult's annual list of the Fastest Growing Brands, which measures growth for both emerging and established companies. Joanna Piacenza, head of industry intelligence at Morning Consult, joined Cheddar to break down the key findings of the report.
Iwao Fusillo, Chief Data & Analytics Officer, GM, joins Cheddar News to dispel myths and cut straight to the facts about GM's role in an all-electric future.
Goldman Sachs is rolling out an Amazon Web Service for trading firms called GS Financial Cloud for Data with Amazon Web Services. The move comes as Wall Street looks to keep up with today's evolving tech.
Online ad-tech company Innovid made its public debut on the New York Stock Exchange. CEO and co-founders Zvika Netter joined Cheddar's "Opening Bell" to discuss factors that drove the company to launch an IPO via a SPAC deal. He noted that the rapid growth of connected TV advertising (CTV) made it an opportune time for his business to go public. While the company is profitable, Netter also explained the various avenues it will take to increase total revenue.
Lululemon is accusing Peloton of copying a number of patented apparel designs and has filed a lawsuit. Julie Zerbo, founder and Editor-In-Chief at The Fashion Law, joined Cheddar to discuss whether or not Lululemon has a valid case. The lawsuit comes as sales for Peloton's premiere products, like its treadmills, have been slowing and it looks to provide more offerings. Zerbo also discussed a co-branding partnership between the two companies that ended amicably earlier this year and how it could play into the outcome of the case.
Airbnb has come under fire after an Axios report found that the rental company has properties available in China's Xinjiang region where the nation has been accused of committing genocide against Uyghur Muslims, demolishing their homes, and replacing them with tourist attractions.
With the emergence of the omicron variant, the U.S. is considering tightening international travel guidelines. The CDC said it might reduce the window for foreign travelers to submit a negative COVID-19 test from three days prior to one day before allowing entry.
