Ford Motor Co Reports Net Income of of $12.3 Billion in Q4 2021, Aims for Annual EV Sales of 600,000 Units by 2023

author: FutureCar Staff    

Ford Motor Co announced its fourth quarter earnings for 2021 on Thursday which included higher revenue as the company moves on from the semiconductor shortages that impacted vehicle production in 2021. 

The automaker's Q4 results include revenue of $37.7 billion with net income of $12.3 billion. Ford reported an operating profit of $10 billion, and an operating margin of 7.3% for the year.

Full-year net income was $17.9 billion after a company adjusted EBIT of $10.0 billion after reclassifying last year's Q1 gain from Ford's investment in electric truckmaker Rivian.

Ford held roughly a 12% stake in Rivian when the startup launched its high-profile IPO in November. On Tuesday, Ford said that it expected to book an $8.2 billion gain from its investment in Rivian. However, Rivian stock price fell from its IPO price of $78. The company's shares were trading at $60.36 on Thursday, meaning that Ford's investment is now worth roughly $6.6 billion.

Ford's plans for 2022 include ramping up production of EVs. The company expects that global production capacity of high-volume electric vehicles, such as the F-150 Lightning, to be at least 600,000 vehicles by 2023 as its looks to catch up to segment leader Tesla.

In Q4, Ford experienced strong demand for the new Bronco SUV, Maverick pickup, as well as the Mustang Mach-E. The Bronco and Maverick were crowned North American Truck and Utility vehicle of the year in 2021, which helped to generate additional consumer interest. The two award winning vehicles contributed to a two-point U.S. share gain, making Ford the country's top-selling automaker.

Ford's growing business in North America illustrates how the company is winning customers with the popular new models. Ford CEO, Jim Farley, said "without question, (it is) the most exceptional product lineup I've seen in my 30-plus years in this industry." 

Farley's optimism will likely extend into 20222 with the launch of the electric E-Transit cargo van and F-150 Lightning pickup this spring. 

With a lineup of popular models, Ford's CFO, John Lawler, said the automaker expects full-year 2022 adjusted EBIT to be even stronger in 2022, from $11.5 billion to $12.5 billion, representing an increase of 15% to 25% over 2021. 

The high end of the adjusted EBIT range equates to a margin of 8% which, if achieved, would be one year earlier than the company's previous target. Adjusted free cash flow for the year is expected to be $5.5 billion to $6.5 billion.

"Our team did a fantastic job working with partners to maximize component availability," said Lawler. "We allocated those volumes to in-demand new vehicles like the Bronco and Maverick, profitable models like F-Series (trucks) and Transit, and customer orders."

Going forward, it's likely that Ford's new EVs might lead the transformation of the company. 

Orders for the new EVS made Ford the No. 2 seller of electric vehicles in the U.S. in 2021 behind Tesla, what Farley called "an important early step toward eventually being the true EV leader." 

"Financial performance is obviously critical," said Farley. "We're also proud that customers see how Ford is taking EVs mainstream, and have already ordered or reserved more than 275,000 all-electric Mustang Mach-E SUVs, F-150 Lightning pickups and E-Transit commercial vehicles – and we're breaking constraints to deliver every one of them as fast as we can."

Ford lags behind Tesla though, which sold 190,393 Model Y crossovers and 121,877 Model 3 sedans in the US in 2021. But Ford has a chance to gain market share once F-150 Lightning deliveries begin. The F-150 has been the best-selling truck in the U.S. for over 40 consecutive years and the electric version is poised to become a big hit for Ford.

Last month, Ford announced it received so many reservations for the F-150 Lightning pickup that it's doubling production to 150,000 vehicles a year to meet demand and cut down on wait times for customers. 

Ford originally planned to produce around 40,000 F-150 Lightning pickups a year, then expanded that to 80,000 as the number of customer deposits grew.

Farley said that Ford will double worldwide EV manufacturing capacity to at least 600,000 by 2023. Ford's goal is to have fully electric vehicles represent at least 40% of its product mix by 2030.

Despite Ford's positive outlook for 2022, the company's shares closed down 3.6% at $19.89 on Thursday.

FutureCar Staff