Ford beats Q4 earnings estimates despite EV pullback, hybrid shift
Ford reported its fourth-quarter earnings Tuesday after the market, beating Q4 revenue and profit estimates. The automaker expects the momentum to continue in 2024 despite pulling back EV investments.
Ford’s fourth-quarter EV sales
Ford sold a record 25,637 EVs in the last three months of 2023 (+24% YOY), edging out rival GM. The F-150 Lightning topped Rivian’s R1T to become the best-selling electric pickup of the year, with 24,165 units handed over.
The Mustang Mach-E was the second best-selling electric SUV in the US behind Tesla’s Model Y with 40,771 models sold, also a record.
Ford’s E-Transit was the best-selling electric van, with 7,672 units sold last year, up 18% from 2022.
Despite the growth, Ford has scaled back EV initiatives. Ford’s CFO, John, said the company is “slowing down several investments,” including around $12 billion in EV spending last year.
Last month, Ford announced it was cutting F-150 Lightning production amid “slower than expected” demand. The production cut is the second in less than five months.
Ford said the move was to “achieve the optimal balance of production, sales growth and profitability.”
Lawler added that Ford is “changing the pace and flow” of capital and EV capacity in November, including plans to scale back production at its Marshall plant by about half.
Rival GM announced last month it was changing its “all in on EVs” strategy to include more PHEVs as it faces growing competition.
Ford Q4 earnings results
Ford posted Q4 revenue of $46 billion, up 4% YOY on favorable net pricing. This tops Wall St estimates of around $43 billion, according to data from Estimize. However, Ford had a net loss of $526 million in the fourth quarter due to a $1.7 billion adjustment for UAW wages.
Fourth quarter adjusted EPS of $0.29 also topped Wall St bottom line estimates of $0.12 per share.
For the full year, Ford’s revenue reached $176 billion, up 11%. Ford’s net income improved to $4.3 billion in 2023, while adjusted EBIT was essentially flat at $10.4 billion.
Ford confirmed plans to defer EV spending with slower-than-expected demand. Despite this, Lawler said ” EVs are here to stay, customer adoption is growing, and their long-term upside is central to
Ford+.”
Ford’s Model e, electric vehicle segment, saw a net loss of $4.7 billion last year. The automaker said the losses were due to “extremely competitive pricing” and investments for its next-gen EVs.
EV volume was up 20%, driven mainly by the F-150 Lightning. However, operating income slipped to $1.6 billion while EBIT margins fell to -98.2%.
Ford said the growing operating losses are due to lower pricing, higher material costs, and investments in its next-gen EVs.
As Ford built momentum with its services, software subscriptions rose 8% to about 630,000 in Q4. Last year, Ford expanded its BlueCruise ADAS to Great Britain, Germany, and Spain, joining the US and Canada.
Ford expects its Model e-business to post an operating loss of $5 to $5.5 billion this year as it prepares to launch its next-gen EVs. Overall, Ford expects to post adjusted EBIT of $10B to $12B this year.
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Environment
China and India still rely heavily on coal, climate targets remain ‘very difficult’ to achieve
The Huaneng Huaiyin power station in Huaian, China, on Nov. 12, 2023.
Nurphoto | Nurphoto | Getty Images
China and India have not reduced coal generation for electricity, according to a new study, making it harder for Asia’s largest carbon emitters to reach their climate targets.
While both Asian countries have ambitious plans to cut emissions, heavy reliance on coal — the dirtiest fossil fuel — continues to be the most reliable and affordable way of meet rising electricity demand.
Global electricity generation from coal has been consistently rising for the last two decades, nearly doubling from 5,809 terawatt-hours in 2000 to 10,434 TWh in 2023, a new study by energy think tank Ember found. The highest increases came from China (+319 TWh) and India (+100 TWh), the study showed.
According to the IEA, coal remains the biggest energy source for electricity generation, supplying more than one-third of global electricity. It will continue to play a crucial role in industries such as iron and steel until new technologies are available.
“It will be very difficult to meet targets without a rapid face down in coal. It’ll certainly be out of reach,” said Francis Johnson, senior research fellow and climate lead at the Stockholm Environment Institute’s Asia Center.
“We’re not phasing out coal fast enough,” he warned.
China
Asia’s largest economy has two big climate goals: to strive for peak carbon emissions in 2030, and reach carbon neutrality in 2060. Still, reliance on coal has shown no signs of waning.
Electricity demand in the East Asian nation has increased by sevenfold since the beginning of the decade, while coal demand has climbed by more than five times over the same period, Ember’s research showed.
China, the world’s largest coal producer, emitted 5,491 million tonnes of carbon dioxide from electricity generation in 2023. That’s at least three times more than the U.S. (1,570 MtCO2) and India (1,470 MtCO2), data from the study showed.
Just because you cut coal emissions, it doesn’t mean you get away with emissions in the other sectors
Francis Johnson
senior research fellow and climate lead at the Stockholm Environment Institute
However, the country has made notable progress in renewable energy development, leading to a slowdown in the rate of emission increase from an average of 9% annually between 2001 and 2015, to 4.4% annually between 2016 and 2023, the energy think tank said.
“China is very close to peak emissions and the clean energy transition is going extraordinarily fast,” Dave Jones, global insights program director at Ember, told CNBC.
“Even with very high levels of electricity demand growth, it looks like the levels of renewables growth would be enough,” Jones said.
Excavators transfer coal at the coal terminal in China’s eastern Jiangsu province on January 22, 2024.
Str | Afp | Getty Images
Clean electricity contributed to 35% of China’s total electricity generation, the Ember report showed. Hydropower — its second-largest energy source — made up 13% of that mix, while wind and solar combined reached new highs of 16% in 2023.
“Had wind and solar generation not increased since 2015, and demand had instead been met by coal, emissions would have been 20% higher in 2023,” the report highlighted, adding that those two sources can now generate enough electricity to power Japan.
But Stockholm Environment Institute’s Johnson warned China still needs to be less dependent on other forms of fossil fuels.
“Phasing down coal is absolutely necessary, but it’s not sufficient. Just because you cut coal emissions, it doesn’t mean you get away with emissions in the other sectors,” he noted.
India
When India became the world’s most populous country last year, power demand grew by 5.4% compared to 2022. This was more than double the global increase.
The country’s leaders have been optimistic about its path to net zero, making bold claims that 50% of its power generation will come from non-fossil fuel forms of energy by 2030.
Emissions from the power sector are expected to peak around 2030, while total energy-related emissions will reach their highest around 2034, Climate Action Tracker estimated.
Tuticorin Thermal Power Station in Tuticorin, India, on March 21, 2024.
Bloomberg | Bloomberg | Getty Images
But the Ember study showed that added pressure from droughts pushed the country to generate 78% of its electricity from fossil fuels, where coal made up 75% of that mix.
Like China, India has also made significant strides in other forms of renewable energy.
In 2023, India overtook Japan to become the world’s third largest solar power generator, according to Ember.
Ember found that India’s solar power generation totaled 113 terawatt-hours (TWh) last year, representing a 145% increase since 2019. This ranks behind China (584 TWh) and the U.S. (238 TWh).
“When it comes to the pathway to carbon neutrality for China and India, you would expect the emissions to rise when demand grows. But at some point, the GDP growth needs to decouple with emissions where we need it to first peak, then fall,” Ember’s Asia Programme Director Aditya Lolla told CNBC.
Revived truck brand Scout Motors has set the timetable for the debut of its first-ever EVs. This summer, the public will catch a glimpse of an all-electric pickup and an SUV the Volkswagen sub-brand has been developing since its recent inception. Here’s what we know.
The current iteration of Scout Motors is derived from the beloved nameplate of off-road vehicles built by International Harvester in the ’60s and ’70s. While only about 530,000 Scout trucks were built during its 20-year production run, the early Jeep competitor still holds a small but passionate fanbase.
In 2022, Volkswagen Group shared plans to capitalize off that heritage and revive the namesake for the modern, EV age while still delivering customers the rugged, off-road performance its remaining predecessors are still celebrated for. With the help of contract manufacturer Magna International, Scout Motors has two initial EV models in development
We know the two flagship models will be built in the US, specifically in South Carolina, but so far, we’ve only seen broad renderings of them. The young EV brand is currently working through design and development in Novi, Michigan, while a new Innovation Center is being built nearby.
Meanwhile, construction of Scout Motors’ production facility in The Palmetto State is underway. Before those builds begin however, we still need to see what Scout Motors’ first two EVs look like and know we know when to expect that milestone.
We’ll get a look at Scout Motors’ first EV in late summer
Per an update to the Scout Motors website, an EV reveal is being planned for late summer 2024. Exactly when or where this anticipated event will occur remains TBD. Still, we hope to get the invite as we were there for the groundbreaking ceremony in South Carolina this past February.
That’s about all we’ve learned about new information surrounding Scout Motors’ first two EVs, but previous conversations with executives, including CEO Scott Keogh, have hinted at what to expect during the summer reveal.
In talks with Electrek, Keogh expressed the advantage Scout Motors has as a clean slate design approach that, unlike most young EV brands, has an existing heritage backed by the purchasing and production expertise of parent Volkswagen Group.
That said, Scout intends to do its own thing regarding EV development and design. Scout’s Chief Production Officer, Dr. Jan Spies, told us that the platform technology Scout’s first two trucks will sit atop is “not a twin, daughter, or brother” to any of the platforms currently used in the larger VW Group.
Spies elaborated, saying Scout Motors’ bespoke EV platform gives it an advantage in terms of development speed and offers a beautiful opportunity to deliver a unique car for its environment. Keogh assured us the two bespoke EVs are both “badass” and “robust,” designed to tackle the elements and stay true to the legacy of trucks that inspired them.
We expect Scout to sacrifice a bit of range in exchange for such off-road performance, but we won’t know where those numbers land until the official reveal. In February, Scout Motors’ CEO said the final designs of both trucks were super close, with the actual engineering of the EVs to quickly follow.
While the young automaker has confirmed it will unveil both models in late summer, we have already been warned that EV production will require some cadence while the South Carolina plant continues to scale. Which model will be built first has yet to be determined… or at least made public. Maybe we will find out in a couple of months. We will report back then!
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Tesla has now disclosed that it is spending money to promote its shareholders vote to approve of Elon Musk’s $55 billion compensation package.
Back in 2018, Tesla shareholders approved one of the biggest compensation plans of all-time: a $55 billion fully stock-based CEO compensation plan for Elon Musk.
In January, a judge sided with lawyers representing a Tesla shareholder alleging that Tesla’s board misrepresented the compensation package when presenting it to shareholders.
It’s a complicated issue, but in short, the judge found that Tesla’s board and Musk didn’t play by the rules of a public company when it presented the plan to shareholders.
The judge found that Tesla had governance issues when coming up with the compensation plan and those issues were not communicated to shareholders before voting on the plan.
Instead, Tesla claimed that the plan was negotiated by “independent board members” when it was found that some board directors had personal financial dealings with Musk outside of Tesla, amongst other things.
The Delaware court found that this invalidated the vote, and therefore, Tesla had to rescind the compensation plan.
Last month, Tesla told shareholders that it will ask them to vote on moving Tesla’s state of incorporation to Texas and then revote for Musk’s compensation plan without changing anything.
Since then, Tesla has been working hard to get shareholders to vote for those two items. It started a website to promote it, sent countless communications to shareholders about it, and now, the company’s board is going a step further.
In a new filing with the SEC, Tesla confirmed that it is now buying ad spaces to encourage shareholders to vote for these items:
Tesla has to file with the SEC all the “communications” it has with shareholders regarding the vote and this time, the communications are listed as “sponsored” on Google – meaning that Tesla bought Google ads for it.
The automaker even spent money on Elon Musk’s pockets by buying ads on X with the post listed as “promoted”.
Tesla shareholders have until June 13th to vote their shares.
Electrek’s Take
Tesla’s board is clearly getting nervous about the vote.
It’s pretty funny that Tesla’s board, which got Elon’s compensation package invalidated after a judge found governance issues, is now approving spending Tesla’s money on an Elon-owned platform to try to influence a vote that would send even more money into Elon’s pockets.
That’s where we are now.
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