Automaker Ford estimates its electric vehicle division will lose $4.5 billion this year, $1.5 billion more than it predicted in March.
Fortune said Ford’s revised forecast comes from a sluggish receptiveness by consumers to the new battery-powered vehicles.
So far this year, Ford’s EV division has shed nearly $1.8 billion, Fortune reported.
Ford now also estimates it will reach an annual production rate of 600,000 units a year by 2024, Fortunate noted. Ford had been hoping to hit that number by the end of this year.
Ford reduced prices on some of its electric cars last week by as much as 17%.
Ford CEO Jim Farley and Ford can be patient about electric vehicles, due in part to a strong performance in the rest of the company
Fortune reported that Ford generated $45 billion in revenue last quarter, a 12% increase year on year. The company reported strong growth in its commercial vehicle segment where revenue grew by 22% to hit $15.6 billion.
Reuters reported that the U.S. government plans to end purchases of gas-powered vehicles by 2035, under an executive order signed by President Joe Biden in 2021, in an effort to lower emissions and promote electric cars.
The government owns more than 650,000 vehicles and purchases about 50,000 annually. Biden’s executive order said that light-duty vehicles acquired by the government will be emission-free by 2027.
Total federal government operations will reduce emissions by 65% by 2030 under the plan.
Fortune noted that while demand for EVs is growing, it’s not enough to keep pace with increased production. Fortune said over 90,000 electric cars and trucks are on dealer lots, four times as many as a year ago.
In addition, Ford is in a price war with other electric car manufacturers, particularly Tesla, which cut prices to jump-start sales and increase market share