DETROIT — Ford Motor Co. is doubling planned outlays on electrified vehicles to $22 billion through 2025, as the company reported a $2.8 billion fourth-quarter loss due to costly product launches and significant one-time charges.
For all of 2020, Ford recorded its first net loss since the Great Recession — $1.3 billion — as the coronavirus pandemic disrupted production and sales.
Ford said adjusted earnings before interest and taxes more than tripled from the fourth quarter of 2019 to $1.7 billion. Revenue fell 9 percent to $36 billion.
The automaker generated earnings of nearly $1.1 billion before interest and taxes in North America during the quarter, a 53 percent increase, with a profit margin of 4.9 percent.
Ford lost money in all other overseas business units in the quarter besides Europe, where it earned $414 million. Ford Credit made $912 million, up 48 percent from a year ago.
The fourth-quarter net loss was attributable to number of previously announced special charges, including $610 million for a Takata airbag recall, $2.5 billion as part of a withdrawl from manufacturing in Brazil and $1.5 billion related to remeasurement of pension plans.
Ford shares rose 1 percent to $11.48 in after-hours trading.
Pleased with progress
Ford CEO Jim Farley said he was pleased with the company’s progress amid a challenging year.
“We’ll start to grow again, but most importantly, in the right areas,” he said.
That includes a larger bet on electrified and autonomous vehicles.
Ford in 2018 committed to spending $11 billion through 2022 on EVs, later bumping that up to $11.5 billion. Of that original figure, Ford says it has already spent $7 billion.
It now plans to spend $29 billion through 2025 on electric and autonomous vehicles, topping a $27 billion commitment by General Motors.
Spending plans
CFO John Lawler said a “majority” of the $22 billion dedicated to EVs would be spent on battery-electric models, although he declined to say how many Ford plans to add to its lineup. He also declined to match GM’s stated ambition of going all-electric by 2035, noting Ford was focused on introducing upcoming models such as the F-150 EV and E-Transit.
Still, Farley took a swipe at GM, which earned major publicity for its recent EV announcement, saying, "Our time is now. We're not talking about aspirations."
The additional EV investment, Farley noted, does not include the potential from vertically integrating EV battery cell production -- an area he has said Ford is exploring, telling analysts to “expect more news” on that front in the future.
Lawler said the $7 billion commitment toward autonomous vehicles would include spending on Ford-owned Argo AI as well as the planned 2022 launch of autonomous commercial services.
Chip shortage
Ford said it expects the global semiconductor shortage to potentially reduce first-quarter global production between 10 percent and 20 percent. Lawler said it could lower Ford’s 2021 adjusted earnings by $1 billion to $2.5 billion, adding that Ford would provide a more detailed look on how the shortfall will affect company’s earnings when it reports first-quarter results in April.
Tight chip supplies are impacting multiple automakers around the world. Lawler said Ford would look at a number of remedies, including the direct purchase of chips.
“We’re being very proactive,” Lawler said. “We’re going to work the system to optimize what we can. We’re looking at every angle that we can so we can get as many chips in and minimize the impact on the business.”
