DETROIT (Reuters) – Ford Motor Co more than doubled the amount it plans to invest in electric and autonomous vehicles on Thursday to $ 29 billion, while posting a net loss of $ 2.8 billion in the fourth quarter.
The No. 2 US automaker also said the global semiconductor chip shortage could lead to a 10% to 20% loss in production in the first quarter.
For the year, Ford reported a net loss of $ 1.3 billion, or 32 cents a share, compared to a modest prior year profit of 1 cent a share.
Ford previously said it expected profits of between $ 600 million and $ 1.1 billion by 2020.
Ford had lost $ 2.8 billion, or 70 cents a share, in the fourth quarter, compared to a loss of $ 1.7 billion, or 42 cents a share, a year earlier.
The company expected operating profit to increase to $ 8 billion to $ 9 billion by 2021, from $ 2.8 billion last year. The 2021 figure includes a $ 900 million non-cash profit on Rivian, the electric vehicle start-up in which Ford has invested, but does not include the effect of the ongoing global semiconductor shortage.
According to Chief Financial Officer John Lawler, vehicle production lost due to chip shortages could reduce Ford’s operating income by $ 1.0 billion to $ 2.5 billion in 2021.
In the pandemic-ridden 2020, Ford’s total revenue fell from $ 156 billion in 2019 to $ 127 billion.
Ford closed the quarter with nearly $ 31 billion in cash and $ 47 billion in liquidity, compared to nearly $ 30 billion and more than $ 45 billion in the previous quarter, respectively.
The company’s operating margin in the fourth quarter was 4.8%, compared to a full year target of 8%. Ford said it is targeting an operating margin of 8% this year, with 10% in North America and 6% in Europe.
Ford said it “doubled” the number of connected electric vehicles and said it will invest $ 22 billion in electrification through 2025, nearly double what it had previously committed to electric vehicles.
Ford also said it will invest $ 7 billion in self-driving or autonomous technology development for 10 years to 2025 – $ 5 billion of that from 2021.
“We are accelerating all of our plans,” Chief Executive Jim Farley said in a statement, including increasing battery capacity and adding more electric vehicles to its future portfolio.
CFO Lawler told reporters, “If EVs continue to gain favor quickly, especially with commercial customers, we want to be clear that we are not going to hand over land to anyone.”
Ford previously pledged to invest $ 11.5 billion in electrification, including gasoline-electric hybrid vehicles, through 2022. That included the launch of the Mustang Mach-E EV crossover and electric versions of the F-150 pickup and Transit. van.
US rival General Motors Co has said it will spend $ 27 billion on electric and autonomous vehicles by 2023. It said it plans to offer 30 electric vehicles globally by 2025 and targets annual sales of 1 million electric vehicles in the United States and China by 2025.
Reporting by Ben Klayman and Paul Lienert in Detroit; Editing by Dan Grebler