Ford Motor plans to up its investment in electric and autonomous vehicles to USD29 billion through 2025, even as it posted a fourth-quarter net loss of USD2.8 billion. from a loss of USD1.67 billion, during the same three months of 2019.
According to Ford CFO John Lawler, the company is forecasting it will earn between USD8 billion and USD9 billion in adjusted pre-tax profits and generate between USD3.5 billion and USD4.5 billion in adjusted free cash flow in 2021. However, that doesn’t factor in a global shortage in semiconductor chips that may lead to a 10% to 20% loss in first-quarter production which could lower Ford’s earnings by USD1.0 billion to USD2.5 billion this year, Lawler said in a press release.
The No 2 US automaker said in a statement that it was “doubling down” on connected electric vehicles, saying it will invest USD22 billion in electrification through 2025, nearly twice what it had previously committed to EVs.
Ford also said it will invest USD7 billion in self-driving, or autonomous, technology development.
“We are accelerating all our plans – breaking constraints, increasing battery capacity, improving costs and getting more electric vehicles into our product cycle plan,” Chief Executive Jim Farley said in a statement. “People are responding to what Ford is doing today, not someday.”
Previously, Ford committed to invest USD11.5 billion in electrification, including gasoline-electric hybrid vehicles, through 2022. That included the launch of the Mustang Mach-E EV crossover, and electric versions of the F-150 pickup and Transit van.
Analysts and investors are expected to look past the loss and focus on Ford’s guidance for 2021. Despite a faster-than-anticipated recovery from the pandemic last year, the industry now faces a shortage of semiconductor chips that’s causing automakers to cut vehicle production.
Meanwhile, US rival General Motors Co has said it will spend USD27 billion by 2023 on electric and autonomous vehicles. It said it plans to offer 30 EVs globally by 2025 and is targeting topping annual sales of 1 million EVs in the United States and China by 2025.