DETROIT (Reuters) – Ford Motor Co more than doubled the amount of money it plans to invest in electric and self-driving vehicles on Thursday to $ 29 billion, even though it posted a net loss of $ 2.8 billion in the quarter quarter.
The second US automaker also said that the global shortage of semiconductor chips 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 per share, compared to a modest profit the previous year of 1 cent per share.
Ford previously said it expected a profit between $ 600 million and $ 1.1 billion in 2020.
Ford had a fourth-quarter loss of $ 2.8 billion, or 70 cents a share, compared with a loss of $ 1.7 billion, or 42 cents a share, a year earlier.
The company’s projected operating profit would increase from $ 8 billion to $ 9 billion in 2021, compared to $ 2.8 billion last year. The 2021 figure includes a $ 900 million non-cash gain from Rivian, the electric vehicle startup Ford invested in, but does not include the effect of the ongoing global semiconductor shortages.
Loss of vehicle production due to chip shortages could reduce Ford’s 2021 operating profits by $ 1.0 billion to $ 2.5 billion, according to chief financial officer John Lawler.
In a pandemic-ravaged 2020, Ford’s total revenue dropped to $ 127 billion from $ 156 billion in 2019.
Ford ended the quarter with almost $ 31 billion in cash and $ 47 billion in liquidity, compared with almost $ 30 billion and more than $ 45 billion, respectively, in the previous quarter.
The company’s operating margin in the fourth quarter was 4.8%, compared to an 8% target for the entire year. Ford said it targets an operating margin of 8% this year, including 10% in North America and 6% in Europe.
Ford said it was “doubling down” on connected electric vehicles, saying it would invest $ 22 billion in electrification by 2025, almost double what it had previously committed to EVs.
Ford also said it will invest $ 7 billion in autonomous or autonomous technology development over 10 years through 2025 – $ 5 billion from 2021 onwards.
“We are accelerating all of our plans,” said Chief Executive Jim Farley in a statement, including increasing battery capacity and adding more electric vehicles to his future portfolio.
CFO Lawler told reporters, “If EVs continue to earn favors quickly, especially with commercial customers, we want to make it clear that we will not give ground to anyone.”
Ford has already pledged to invest $ 11.5 billion in electrification, including gasoline-electric hybrid vehicles, by 2022. This included the launch of the Mustang Mach-E EV crossover and electric versions of the F-150 pickup and the Transit van.
American rival General Motors Co said it would spend $ 27 billion by 2023 on electric and self-driving vehicles. She said she plans to offer 30 EVs globally by 2025 and aims to exceed annual sales of 1 million EVs in the United States and China by 2025.
Reporting by Ben Klayman and Paul Lienert in Detroit; Dan Grebler Edition