Ford said Monday supplier costs will be $1 billion higher in the third quarter than expected due to rising inflation and ongoing supply chain issues.
Ford also disclosed that supply shortages caused a backlog of thousands of assembled but incomplete vehicles. Ford expects between 40,000 and 45,000 unfinished vehicles — most of which are high-margin trucks and SUVs — will remain in the automaker’s inventory awaiting needed parts through the end of the third quarter.
Shares fell 5.49% in after-hours trading.
Supply chain issues have plagued the automotive industry since early 2020, when the COVID-19 pandemic prompted Chinese, US and European governments to halt manufacturing operations. Supplier issues associated with rising inflation continue to affect automakers’ ability to deliver vehicles.
For example, Rivian warned in August that it expects to lose $5.45 billion in 2022, compared to $4.75 billion estimate he shared three months earlier due to “supply chain challenges” and “commodity inflation.” GM reported second-quarter net profit of $1.69 billion in July, a 40% reduction from the same period a year ago due to supply chain disruptions and fuel shortages. semiconductor chips that have caused bottlenecks in its factories.
Despite the surprisingly higher cost and availability of some parts, Ford is sticking to its 2022 adjusted earnings before interest and tax forecast of between $11.5 billion and $12.5 billion. That’s largely because Ford expects to sell all vehicles in inventory in the fourth quarter.
Ford changed its third-quarter adjusted earnings before interest and taxes to between $1.4 billion and $1.7 billion.
The company is due to release its third quarter results on October 26.