Ford reported Q3 earnings after the market closed on Monday, beating Wall St revenue and EPS expectations. However, the company is still losing billions on its EVs. Here’s a closer look at Ford’s third-quarter 2024 earnings report.
Third-quarter earnings preview
Ford’s US retail sales rose 3% in the third quarter, with overall sales up 1% compared to Q3 2023. Overall vehicle sales are now up 2.7% through the first nine months of 2024.
Despite the growth, Ford was outpaced by GM and Hyundai Motor Group (including Kia and Genesis) in US electric vehicle sales.
Ford’s EV sales were up 12%, with 23,509 vehicles sold in Q3. However, with a record 32,095 EVs sold, an increase of 60% year over year, GM topped its crosstown rival. With 70,450 EVs sold, GM is now ahead of Ford at 67,689.
GM topped estimates last week, reporting $48.8 billion in third-quarter revenue. Although the company doesn’t provide a separate EV breakdown, it says it’s “nearing the crossover point to profitability for EV sales.”
After losing another $1.1 billion on its Model e business, Ford’s EV losses reached $2.5 billion through the first half of 2024. Ford expects EV losses to reach between $5 billion and $5.5 billion this year.
According to Estimize, Ford is expected to report total Q3 revenue of $45.2 billion with an EPS of $0.42.
Ford beats Q3 earnings, but EVs put a drag on profits
Ford reported Q3 revenue of $46 billion and an Adjusted EPS of $0.49, topping Wall St estimates. This was Ford’s 10th consecutive quarter of YOY growth.
Q3 2024 Revenue: $46 billion vs $45.2 billion expected.
Q3 2024 Adjusted EPS: $0.49 vs $0.42 expected.
Meanwhile, Ford’s net income slipped 25% to $900 million in the third quarter. The company said the lower profits included a $1 billion “electric-vehicle related charge” amid its strategy shift.
The company’s commercial and software business, Ford Pro, continues to be the main growth driver, with volume and revenue up 9% and 13%, respectively. The unit also generated $1.8 billion in operating profit with an EBIT margin of 11.6%.
Despite this, Ford’s electric vehicle business continues to feel the pressure. Ford Model e lost another $1.2 billion in Q3.
Although revenue slipped 33% to $1.2 billion, Ford said lower material and battery costs enabled it to achieve nearly $1 billion in cost improvements year-to-date.
The improvements were not enough to overcome “industry-wide pricing pressure,” as Model e losses reached $3.7 billion through the first nine months of 2024.
“We are in a strong position with Ford+ as our industry undergoes a sweeping transformation,” Ford’s CEO Jim Farley said on Monday.
Farley said the company has taken “tough action” to create advantages in key areas like software and next-gen EVs.
Ford expects to lose around $5 billion on its Model e business in 2024. The company now expects adjusted EBIT of around $10 billion, at the lower end of its $10 to $12 billion range.
Ford’s stock was down nearly 5% following its Q3 earnings release as investors hoped for better guidance.
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On today’s episode of Quick Charge, I, for one, welcome our new insect overlords. I’d like to remind them that, as a trusted media personality, I can be helpful in rounding up others to toil in their underground sugar caves cobalt mines.
We’ve also got the world’s quickest police pursuit vehicle, an Amnesty International report highlighting Tesla and Mercedes’ efforts to improve worker conditions in the Congo, and an exploration of Trump voters’ love for solar power.
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Donald Trump will push fossil fuels and undo renewable energy policies, but it ultimately won’t stop clean energy’s momentum.
Trump has always pushed for more oil drilling and fewer regulations, left the Paris Agreement in his first term as president, says he hates “windmills,” promised to scrap offshore wind on “day one” if he won the 2024 election, and calls climate change a “scam.” And now that he’s won, this is a direct threat to the US’s pledge to reach net zero by 2050. After all, federal policy directly impacts the pace of renewable energy growth, especially when it comes to incentives and research funding.
The Biden administration’s groundbreaking Inflation Reduction Act (IRA), which has spurred a clean energy boom, will be challenged under Trump. Because Republican states have received 80% of the IRA’s money with which they’ve built factories and created thousands of jobs, a complete IRA repeal is unlikely. What’s more probable is that the Republicans phase out tax credits earlier than planned or cap overall funding.
Federal financial support for innovative technologies and projects could also take a hit. Brendan Bell, COO of Aligned Climate Capital, who formerly led the US Department of Energy’s Loan Programs Office, told Electrek:
My partner Peter and I led the DOE Loan Program Office under President Obama. We supported the first utility-scale solar and storage projects, as well as early EV investments – including the first loan to Tesla.
Today, these technologies are commercialized and are propelling the clean energy transition. None of it would have been possible if these programs had been cut off 10 years ago.
Put simply, Trump can’t turn back the tide of clean energy – but he could delay tomorrow’s solutions and the birth of new industries.
BloombergNEF’s “2H 2024 US Clean Energy Market Outlook,” released at the end of October, examined the worst-case scenario, where control of both the Senate and the House leads to a full repeal of the IRA tax credits:
The wind, solar, and energy storage sectors jointly see a 17% drop in total new capacity additions over 2025-2035, with 927 gigawatts (GW) of cumulative build compared to 1,118GW in BNEF’s base case forecast. Wind sees the greatest fall in activity in this scenario with a 35% drop, followed by energy storage at 15% and solar at 13% relative to BNEF’s base case.
That’s a blow we can’t afford at a time when we need to reduce emissions by 50% from 2005 levels by 2030 to avoid climate disasters becoming even worse than they already are.
But all is not lost. The clean energy market isn’t solely driven by federal policy. Over the last decade, solar, wind, and EVs have become more cost-competitive and popular. State policies play a huge role too, and many states are committed to their own clean energy goals regardless of who sits in the White House. States like California, New York, and Washington have ambitious targets to combat climate change, and deep red Texas is No. 1 in the US for both solar and wind.
Corporations are also key players. Companies like Amazon, Google, and Walmart have committed to going 100% renewable, and they’re not about to reverse course. This demand keeps the market for renewables strong. Plus, there’s significant public support for clean energy jobs, and renewables create more employment opportunities than fossil fuels in many regions of the country.
JD Dillon, chief marketing officer of California-based solar tech manufacturer Tigo Energy (Nasdaq: TYGO), said to Electrek, “The march toward renewable clean energy is both inevitable and the right thing to do. In a perfect world, we would eliminate partisanship from the renewable energy conversation because everyone benefits from a cleaner environment and affordable energy. Unfortunately, none of us live in said perfect world.”
The US clean energy sector may slow down, but it’s hard to stop a train that has already left the station. What consequences this slower-moving train will have for the US and the world remains to be seen.
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The world’s largest EV battery maker is advancing a new type of battery, promising higher energy density. According to a new local report, CATL is investing heavily while ramping up its workforce to bring all-solid-state EV batteries to market.
With trial production reportedly kicking off, we could see CATL launch all-solid-state EV batteries sooner than expected.
According to a new local report from LatePost (via CnEVPost), CATL has entered the trial production phase of 20 Ah samples. The news comes after the EV battery giant added over 1,000 workers to its R&D team this year.
The report claimed that CATL is now focused on the final Sulfide phase and has already commenced trial production of 20 Ah samples.
The company’s solution has an energy density of up to 500 Wh/kg for lithium ternary batteries, 40% more than current batteries. However, the report said charging speed and cycle life are not quite where they need to be.
At 20 Ah, the battery solution is finalized and ready for its next stage, production tech exploration.
CATL is advancing all-solid-state EV batteries
The report says after that it’s mainly manufacturing hurdles, that can be overcome with a bigger workforce.
In April, CATL’s chief scientist, Wu Kai, announced that the company had developed a verification platform for 10 Ah all-solid-state EV battery cells. Wu also said CATL aimed to produce all-solid-state EV batteries in small volumes in 2027, the first time the news was made public.
In September, the company’s chairman, Robin Zeng, said CATL’s research into the new battery tech was “second to none.”
Several companies, including Toyota, Mercedes-Benz, Stellantis, and others, are betting on solid-state EV batteries as the future.
According to data from CnEVPost, CATL is dominating the global EV battery market with a 36.7% share through September 2024.
China’s BYD is second with a 16.4% share of the market. BYD is also planning to launch solid-state batteries. At the September 2024 World New Energy Congress, BYD’s head scientist and engineer, Lian Yubo, said solid-state EV batteries could be widely used in five years.
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