Ford plans to launch small electric car to compete with Tesla's "Model 2"

Ford Motor Company on Tuesday reported fourth-quarter results that beat Wall Street expectations and announced plans to launch a smaller, next-generation electric vehicle to compete with Tesla's upcoming "Model 2," sending the company's shares soaring more than 6% in after-hours trading. Ford said it would offer consumers a "broad choice" between gasoline, hybrid and electric vehicles as it launched an attack on rivals General Motors and Tesla. The company said it plans to cut costs by about $2 billion this year and announced a special dividend.

Ford CEO Jim Farley said in a conference call after the results were announced that the performance in 2023 was "stable", but Ford was far from finished. “We are well positioned for growth, profitability and revenue.

He said Ford would spend less on large electric vehicles, offer fewer large electric vehicles and focus on smaller electric vehicles built on next-generation platforms.

"All of our electric vehicle teams are very focused on cost ... because ultimately the competition will be affordable Teslas and Chinese OEMs," Farley said.

Ford on Tuesday reported a fourth-quarter loss of $526 million, or 13 cents a share, compared with a profit of $1.3 billion, or 32 cents a share, a year earlier. Excluding one-time items, including a pretax loss related to pensions and other postretirement benefits, the company earned 29 cents a share in the quarter, far exceeding the 12 cents average estimate of analysts polled by FactSet.

Revenue rose to $46 billion from $44 billion a year earlier, well above analysts' average forecast of $43.1 billion.

Ford expects adjusted EBIT of $10 billion to $12 billion in 2024 and adjusted free cash flow of $6 billion to $7 billion. Capital expenditures are expected to be between $8 billion and $9.5 billion.

Ford said its electric vehicle division expects to generate an EBIT loss of $5 billion to $5.5 billion this year.

The company also declared a first-quarter regular dividend of 15 cents per share and a supplemental dividend of 18 cents per share, payable on March 1 to shareholders of record as of February 16.