Fords Territory SUV BEV is now on the road in China and Ford says electrification will benefit all of Fords regional businesses

Ford's Territory SUV BEV is now on the road in China and Ford says electrification will benefit all of Ford's regional businesses

Ford managed to post a profit in the quarter ended 30 June, but that result was heavily skewed by Volkswagen's $3.5bn investment in its self-driving Argo AI business unit.

Although Ford posted Q2 net income of $1.1bn, it also posted an adjusted EBIT of minus $1.9bn and warned that it expects to make a loss for the year given current economic conditions and assuming no further significant coronavirus-related disruptions to production or distribution. However, the results were better than analyst expectations.

Revenues for the quarter were severely dented by the impact of the pandemic and down 50% on last year at $19.4bn.

Ford also said it maintains a strong balance sheet, with more than $39 billion in cash at end of Q2. This week it said it repaid $7.7 billion against revolving credit lines.

"I could not be prouder of the Ford team's optimism and effectiveness as we manage through this pandemic," said Ford President and CEO Jim Hackett, who maintained that Ford had posted string results, given market conditions. "We delivered a strong Q2 while keeping each other safe, caring for customers and neighbours, and assuring tomorrow," he said.

"Our global team is delivering great value for customers, performing strongly and advancing the business against extraordinary headwinds," said Ford CFO Tim Stone. "You're seeing us fix things that held us back in the past, accelerate in areas like commercial vehicles and SUVs, and set ourselves up for growth in connectivity, electrification and autonomous vehicles."

Wholesale shipments, revenue and earnings before interest and taxes (EBIT) in Ford's Automotive business were down in Q2 with virtually all of the company's worldwide manufacturing suspended for much of the quarter. Improvements of roughly $1 billion each in net pricing and costs partially offset the effect of the shutdown on profitability.

In June, Ford and Volkswagen finalized agreements that expanded their global alliance, leveraging complementary strengths across an expected combined 8 million commercial and electric vehicles, and midsize pickup trucks.

Volkswagen also completed its investment in Argo AI, a company in which Ford already had an ownership interest. Ford and Volkswagen will work with Argo AI to independently develop AVs at scale based on Argo AI's self-driving system (SDS). Ford says Argo AI's SDS is the first with commercial deployment plans for both Europe and the US, and has the largest geographic potential of any autonomous driving technology to date. Reach and scale are important to developing a robust, cost-efficient SDS.

Ford also said it directed much of its capabilities and resolve in the second quarter to understanding and helping meet coronavirus-related needs of customers, dealers, suppliers, healthcare professionals and first responders, and patients and communities. Initiatives like enhanced and new online services and deferred financing payments on new vehicles in the US benefitted customers and Ford as commerce stalled, then began to recover.