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Ford's Model e division is now losing over $100,000 per EV sold. As a result, the carmaker is looking to scale back EV production, according to industry insiders who claim Ford has cut back on battery orders significantly.
I dont think it would be fair to call that a loss per vehicle then. When they built their first vehicles long long ago they also mustve been in the red for a while. Thats called “investing in company infrastructure” and not “selling at a loss”.
The money is paid, the loss of money is over. Surely they are making a per vehicle profit already and it will just take some time to go overall positive for their investment.
I dont think it would be fair to call that a loss per vehicle then.
It’s common to break down the cost of Fixed Asset Investment to per unit produced by the investment. I won’t comment on whether it’s “fair” or not but it is common and it’s how the article arrived at this eye popping “loss per vehicle” number.
This is why the incremental cost of a unit are often a better measure for longer term profitability and decision making than the unit average cost, especially when you aren’t factoring in the market size and ability to repurpose sunk costs in that unit average cost.
Ok i guess thats how it is, still weird because you rarely see a per product profit value in this sort of format. Seems like they enjoy crying over losses and staying silent over profits.
Seems like they enjoy crying over losses and staying silent over profits.
It’s not in the actual report put out by Ford. It’s a creation of the Journalist who wrote the article. So you are unhappy with Julian van der Merwe, the author of the article.
I dont think it would be fair to call that a loss per vehicle then. When they built their first vehicles long long ago they also mustve been in the red for a while. Thats called “investing in company infrastructure” and not “selling at a loss”.
The money is paid, the loss of money is over. Surely they are making a per vehicle profit already and it will just take some time to go overall positive for their investment.
It’s common to break down the cost of Fixed Asset Investment to per unit produced by the investment. I won’t comment on whether it’s “fair” or not but it is common and it’s how the article arrived at this eye popping “loss per vehicle” number.
This is why the incremental cost of a unit are often a better measure for longer term profitability and decision making than the unit average cost, especially when you aren’t factoring in the market size and ability to repurpose sunk costs in that unit average cost.
Exactly, which is where the term “economies of scale” comes from.
More units = more economy
Ok i guess thats how it is, still weird because you rarely see a per product profit value in this sort of format. Seems like they enjoy crying over losses and staying silent over profits.
It’s not in the actual report put out by Ford. It’s a creation of the Journalist who wrote the article. So you are unhappy with Julian van der Merwe, the author of the article.
Lol, the dude is literally a neck beard.
Cowboy Bebop rocks tho
That’s how accounting works. You don’t get to change the federally mandated accounting practices.
It’s called GAAP
https://www.investopedia.com/terms/g/gaap.asp