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Ford Motor Company, the iconic American carmaker, has announced that its electric vehicle (EV) division is losing billions of dollars and should be viewed as a startup company.
The announcement was made on Wednesday as Ford reported a $2.2 billion loss in its fourth quarter earnings. The loss was attributed in part to the company's EV division, which has seen a dramatic rise in losses since its launch two years ago.
Ford's EV division has been losing money for some time, but the losses have accelerated in recent quarters. In the fourth quarter of 2020, the division lost an estimated $2.2 billion, compared to a $1.7 billion loss in the third quarter.
The losses are due in part to the high cost of developing and producing electric vehicles, as well as the challenges of selling them in a competitive market. Ford CEO Jim Hackett said the company is investing heavily in the EV division to ensure its long-term success.
“We are treating the EV business in a startup-like mode, which means making investments, taking risks and managing costs very tightly,” Hackett said in a statement.
He added that the company is focusing on improving the design and performance of its EVs, as well as creating more charging infrastructure to make them more accessible and appealing to consumers.
Ford's EV division is part of the company's broader strategy to transition to electric and autonomous vehicles, which it hopes will fuel its long-term growth.
Despite the losses, Ford remains committed to the EV division and believes it can eventually become profitable. The company has invested billions of dollars in the division and is confident that its investments will pay off.
“We believe that electric vehicles will be an important part of our future, and we are committed to making the investments necessary to ensure we remain competitive in this rapidly evolving space,” Hackett said.