May 24, 2024

The EV revolution has hit a stumbling block. Sure, sales are technically rising, but they’re not rising anywhere near as quickly as projected. Automakers like Ford are losing big on each vehicle sold, with losses totaling in the billions — and now, The Verge reports that Ford is starting to wonder if maybe it should have hedged its bets on smaller, more affordable cars as opposed to expensive fully-loaded electric SUVs.

To be clear, Ford is not alone in this. Mercedes CFO Harald Wilhelm called the EV market a “brutal space” after the luxury automaker reported profits and revenues down in Q3 2023 because of EVs. GM reported EV losses of $1.7 billion at the beginning of the year. Things are looking up for the American brand, but it’s still losing money as part of an industry-wide reckoning.

Ford stands out from its competition, though. The company made the decision to stop making cars back in 2018 and quickly axed the Fiesta, Focus, Fusion, and Taurus from its North American lineup. If it was affordable, had four doors and wasn’t a truck or SUV, Ford didn’t want to make it anymore. A few years later, the company announced it was diving head first into the EV pool with billions in investments. Not long after that, the company debuted the Mustang Mach-E and F-150 Lightning, which were some of the hottest vehicles on the market in the early 2020s.

But now, the realities of the market have caught up with the company. That bet on expensive trucks and EVs at the expense of small cars has resulted in losses of billions, as The Verge details:

The company reported its first quarter earnings last night, and woo boy, it’s rough. Ford said it lost $1.3 billion on the sale of 10,000 electric vehicles in the first three months of the year — a staggering figure that amounts to $130,000 lost for every EV sold.

Even Ford’s “Model e” tech division reported a revenue decline of 84%. While the EV side of the company is bleeding, sales of big trucks and SUVs are still helping to sustain it; the company reported Escape, Explorer, Expedition, and Bronco sales of just under 217,000, 15% more than 2023 sales.

The company is now counting on smaller, affordable EVs as its future, something it should have done in the first place. Ford is working on new battery tech and has a Silicon Valley “skunkworks” team dreaming up new, small EVs that can’t come soon enough. Ford CEO Jim Farley says these cheap EVs will be designed with city living in mind. “We believe that’s where the adoption of EV will grow the fastest,” he said. “And we believe we can compete in segments of small cars and vehicles, more affordable vehicles in a unique way that’s Ford.” All we can say is: good luck.

Read more: Hybrid cars are back in as electric vehicle sales slow

A version of this article originally appeared on Jalopnik.

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