Ford’s electric vehicle division will post a $3 billion loss this year despite increasing sales.

Ford predicts that its electric vehicle division will generate a loss of about $3 billion this year.

As a result of investing in new production facilities in Tennessee and Kentucky and exploring new battery chemistries, operating losses are projected to rise.

Ford shared the gloomy outlook during a call with reporters on Thursday morning.

Ford predicts that Model e, its electric vehicle division, will lose over $3 billion by 2023, up from $2.1 billion in 2018. Even if sales of the Mustang Mach-E electric crossover and the F-150 Lightning full-size electric pickup truck rise and the business invests more in enhanced manufacturing, the predicted increase in losses is inevitable.

The projection was made in a call with reporters on Thursday morning, during which Ford detailed its new system for releasing financial data. Ford has introduced a new reporting structure that divides its operations into Ford Blue (gas/hybrid vehicles), Ford Model e (breakout EVs), and Ford Pro (commercial vehicles) (commercial vehicles).

According to John Lawler, Ford’s chief financial officer, “we’ve virtually refounded Ford” by dividing the company into departments that each contribute to the Ford+ plan for development and value in new and improved ways.

Lawler addressed the media and discussed the anticipated losses for the Model e division.

He described Ford Model E as “an electric vehicle startup within Ford.” It’s common knowledge that electric vehicle (EV) startups incur losses as they learn the ropes, increase production, expand their market share, and so on.

Ford will continue to incur growing losses as it makes necessary investments to increase production of electric vehicles. In addition to the $3.5 billion lithium-iron-phosphate battery plant it plans to construct in Marshall, Michigan, the business is contemplating the building of two other battery-cell factories in Kentucky and a third in Tennessee.

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Jack Fitzgerald’s devotion to Formula 1 is the root of his passion for vehicles.

In order to get behind the wheel of all the new vehicles he couldn’t afford, he decided to become an auto writer after working as a detailer at a local dealership group while college. After relentlessly pestering his teachers at the University of Wisconsin–Milwaukee, he was able to travel all throughout Wisconsin in search of auto industry stories, eventually getting his dream position at Car and Driver. His current mission is to keep his 2010 VW Golf on the road as long as possible.