Ford Warns Electric Vehicle Losses Will Persist Until at Least
2029
Ford Motor reported a big loss for 2025 because
of its troubled electric vehicle division, which it has significantly scaled back.
·
Heavy EV Losses Continue: Ford’s electric
vehicle division lost $4.8 billion in 2025 and is projected to lose $4–$4.5 billion in 2026, with losses expected
for at least two more years.
·
Break-Even Delayed: Ford now targets EV break-even around
2029, according to CFO Sherry House.
·
Cumulative Losses: Since 2022, Ford has lost over $16 billion on its electric
vehicle business.
·
Early-Mover Gamble Backfires: Ford’s rapid rollout
of EVs like the Mustang Mach-E and F-150 Lightning failed to generate expected
profits, despite an early lead over traditional rivals.
·
Strategic Pullback: In December, Ford:
o Halted production of
the F-150 Lightning
o Canceled plans for an electric truck in
Tennessee
o Dropped plans for an electric commercial van
·
Shift to Hybrids and Gas:
o A new Lightning variant
will include a gasoline engine to recharge batteries
o The Tennessee plant
will build gas-powered trucks
o Ohio facilities will
produce hybrid and gas delivery vans
·
Lower-Cost EV Still Planned: Ford plans a mid-size electric
pickup priced around $30,000, expected in 2027, using cheaper
components and new production methods.
·
Battery Partnership Unwound: Ford ended its battery
joint venture with SK On, taking full ownership of a Kentucky plant while SK On
controls a Tennessee facility.
·
Big One-Time Charges: The company booked $19.5 billion in
charges in Q4 to cover the cost of its strategic shift.
·
Overall Financial Results:
o Q4 loss: $11.1 billion
o Full-year 2025 loss: $8.2 billion
o Profits from gasoline
vehicles and commercial services partially offset EV losses.
·
Outlook Improves: Ford expects adjusted EBIT of $8–$10
billion in 2026, up from $6.8 billion in 2025, driven by non-EV
businesses.
A
few years ago, Ford Motor jumped out ahead of other established automakers by quickly
rolling out three electric vehicles that it hoped would help it sell more cars and
increase profits.
Instead,
the company is paying a high price for its early start.
On
Tuesday, Ford said its electric vehicle division lost $4.8 billion in 2025 and was
expected to lose $4 billion to $4.5 billion in 2026. The company also said the division
would continue losing money for at least two more years.
“We
are now targeting break-even around 2029,” Ford’s chief financial officer, Sherry
House, said on Tuesday during a conference call to discuss the company’s financial
results.
Including
the loss in 2025, Ford has lost more than $16 billion on its electric vehicle business
since 2022.
In
December, Ford announced that it was scaling back its electric vehicle plans. It
stopped making one model, the F-150 Lightning pickup truck; scrapped plans to produce
an electric truck at a plant it was building in Tennessee; and canceled plans for an electric commercial van.
Instead,
Ford plans to make a version of the Lightning that includes a gasoline engine that
can recharge the truck’s batteries on the go. The company will use the Tennessee
factory to make a gasoline-powered truck, and will make hybrid and gas-powered delivery
vans at a location in Ohio.
Ford
says it still plans to make a medium-size pickup that is supposed to sell for around
$30,000. That truck, expected in 2027, will use new components and production methods
that Ford has said will cost a lot less.
It
also ended a partnership with a South Korean partner, SK On, that was supposed to
jointly produce batteries. Ford has taken full ownership of a factory in Kentucky,
and SK On now solely owns a plant in Tennessee.
Ford
took charges of $19.5 billion against its fourth-quarter earnings to cover the cost
of changing its strategy.
Overall,
Ford lost $11.1 billion in the fourth quarter and $8.2 billion for all of 2025.
The electric vehicle losses were offset by substantial profits in divisions that
make internal-combustion vehicles and sell vehicles and services to commercial customers.
Ford
said it expected its financial performance to improve significantly in 2026. The
company said this year’s adjusted earnings before interest, taxes and other items
were expected to be $8 billion to $10 billion. In 2025, Ford said its adjusted earnings
before interest, taxes and other items were $6.8 billion.