Ford has officially announced its electric vehicle business, called Model e, has lost $3 billion before taxes over the past two years and is expected to lose around the same amount in 2023. The good news is that the Blue Oval's internal combustion (including hybrids) and commercial vehicle businesses, Ford Blue and Ford Pro, are on course for increased profits this year. The EV business is not expected to be profitable, prior to taxes, until 2026.

The EV unit's losses will increase nearly 50% this year alone from $2.1 billion in 2022 as investments in increasing production and developing next-generation products on a dedicated EV platform continue to mount. Chasing Tesla to become a dominant player in the EV market doesn't come cheap. Fortunately, Ford is able to weather these short-term losses for long-term gain.

"We've essentially 'refounded' Ford, with business segments that provide new degrees of strategic clarity, insight and accountability to the Ford+ plan for growth and value," said CFO John Lawler. "It's not only about changing how we report financial results; we're transforming how we think, make decisions and run the company, and allocate capital for highest returns."

Meanwhile, Ford Blue is expecting $7 billion in earnings before interest and taxes and about $6 billion for Ford Pro. Last year, Ford Blue and Ford Pro made $6.8 billion and $3.2 billion, respectively. Internal combustion vehicle profits continue to be critical to funding Ford's bottom line and for future EVs and other mobility-related projects. The losses coming from Model e are not surprising and, in fact, expected.

Last month, the automaker announced a new $3.5 billion battery factory coming to Michigan to produce lithium-iron-phosphate (LFP) batteries for future EVs.

These less expensive batteries are set to become standard next year on the Mustang Mach-E Select trim and F-150 Lightning XLT. The automaker has also made significant EV-related investments at factories in Kentucky and Tennessee. What's also interesting about Ford's announcement is that it's the first time it has posted results for each of its three divisions that were formed last year in a companywide reorganization, rather than reporting financial results by geographical regions.

Ford confirmed it remains on track to reach an EV production capacity of 600,000 units annually by the end of this year. By 2026 that figure will reach two million EVs annually.