Ford Under Pressure: Raw Material Prices Rise, EV Business Remains a Loss-Maker

TVS News AI, editorially supervised, presents Ford Under Pressure: Raw Material Prices Rise, EV Business Remains a Loss-Maker.

Ford has scaled back its loss-making electric vehicle business and benefited from selling large vehicles in the American market. Now the Iran war is creating a headwind: Higher raw material prices are hitting the US group harder than expected.

This means the coming quarters will present a divided picture. The classic car business with larger vehicles is running more strongly again, while the EV business is expected to ease its burdens. At the same time, rising raw material prices are making production costs more important once again.

Why Ford's return to large vehicles matters

The group has scaled back the loss-making area around electric vehicles. At the same time, it has relied on large vehicles, whose sales benefited it in the US market.

That is strategically relevant: Ford has to offset its exit from an economically difficult business area by selling fewer electric models. This creates some room to maneuver, but does not provide complete protection against rising material costs.

The Iran war increases cost pressure

According to Handelsblatt, the main new burden comes from the consequences of the Iran war. These lead to higher raw material prices and therefore to more expensive conditions for production.

For Ford, it therefore no longer matters solely how many vehicles the company sells. How much margin remains from revenue after material costs is also decisive. The combination of a smaller EV business and a core business that is cost-efficient or protected against costs therefore hits the automaker at a sensitive point.

What investors should watch

The news brings together two opposing factors: more business with large vehicles on one hand and higher raw material costs on the other. Whether the reversal of the EV business can offset the decline therefore also depends on how strongly material prices weigh on margins.

Zeit Online and Handelsblatt consistently report on the increased burden from raw material prices as well as the role of the US business with large vehicles. For assessing the coming quarters, it is therefore decisive whether Ford can maintain its sales mix and margins despite the cost-related headwind.

More value for you: Automotive industry, Electromobility and Raw material prices.

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