NEW YORK ― Ford reported lower profits on Monday and reduced its full-year earnings outlook as hefty one-time electric vehicle (EV) expenses weighed on results.
The major US automaker reported third-quarter profits of $892 million, down 26 percent from the year-ago level, on revenues of $46.2 billion, up 5.5 percent.
The results were the latest in which Ford has seen profits from its conventional internal combustion engine and fleet businesses offset losses in electric vehicles.
The results included a $1 billion hit after Ford in August pushed back the timeframe of one planned EV model and shifted away from a proposed EV project entirely.
Ford executives have said they are still bullish on EVs in the long-term, but that consumers “aren’t willing to pay a premium,” said Chief Financial Officer John Lawler.
“We need to change the way we’re designing the vehicles,” including having the “smallest battery possible,” said Lawler.
While Ford has slowed some EV campaigns, it has increased output of hybrid vehicles, which enjoyed higher sales again this quarter.
Lawler said Ford needed to do more to reduce costs, citing a hit from product “refreshes,” inflation in a production joint venture and excessive warranty expenses.
Ford has “taken out $2 billion of material, freight and manufacturing costs this year, as we talked about doing, but what we’re seeing is we’re seeing higher warranty costs than we expected, and higher inflationary costs than what we expect,” Lawler said.
Shares of Ford fell 5.1 percent in after-hours trading.
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