Ford Motor Co. CEO Jim Farley said on Tuesday (February 6) that the company is considering adjusting its electric vehicle strategy, including reassessing the need for vertical integration in batteries. On Tuesday, Ford reported its fourth-quarter results, which were adjustedEarnings per share were 29 cents, well above analysts' expectations of 13 cents; adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $1.1 billion, beating analysts' expectations of $997 million.

But among them,The electric vehicle unit Ford Model E remains a drag on the overall business, with the unit's fourth-quarter loss reaching $1.57 billion, higher than analysts' expectations of $1.34 billion. In comparison, Ford's internal combustion engine business FordBlue had revenue of US$26.2 billion and profit of US$813 million in the fourth quarter; Ford's fleet services business FordPro achieved revenue of US$15.4 billion and profit of US$1.8 billion in the fourth quarter, an increase of 11% over the same period last year.

Morningstar analyst David Whiston said in an interview before Ford announced its results, "Ford has a very strong internal combustion engine business that it can rely on to subsidize the transition to electric vehicles and now provide profitability for the company's overall business. "

strategic adjustment

The U.S. automaker confirmed in October last year that it planned to delay $12 billion in capital spending on all-electric vehicles due to slower-than-expected sales growth of electric vehicles.

Jim Farley's remarks on Tuesday were the first to detail Ford's changing strategy for electric vehicles.

"We're trying to use some timing delay tactics," Farley said on the earnings call.Rationalize our battery production capacity levels and timing to meet demand,Additionally we will re-evaluate the vertical integration we rely on and bet on new battery chemistries. "

Farley reiterated,The company still believes electric vehicles will grow, but noted,There will not be widespread adoption of EVs by mass-market consumers until the cost of EVs is closer to that of conventional cars. Typically, electric vehicles are thousands of dollars more expensive than gas-powered vehicles.

Ford Chief Financial Officer John Lawler said that in addition to re-evaluating vertical integration of new battery chemistries,The company is also further considering adjusting production capacity to meet demand and potentially delaying production of next-generation electric vehicles "to ensure they meet our profitability criteria, taking into account new market realities."

The company's electric vehicle business Ford Model E lost $4.7 billion in the past year, which was fully offset by profits from the company's fleet business Ford Pro and traditional internal combustion engine business Ford Blue. The latter two both had profits of more than $7 billion last year.

Lawler said on Tuesday that the electric vehicle unit needs to become independent as soon as possible. He also added,The company is looking to scrap its electric vehicle unit's target of achieving 8% profit margins by 2026.

As Ford delays plans and reevaluates electric vehicle business,It will focus on sales of hybrid vehicles, especially trucks. The company expects sales of its hybrid vehicles to grow 40% this year.

Looking forward, Ford expects adjusted EBITDA in 2024 to be US$10 billion to US$12 billion, higher than analysts' expectations of US$9.24 billion; and it expects capital expenditures in 2024 to be US$8 billion to US$9.5 billion.