Ford Motor Co.‘s EV unit ‘Model e’ has totaled $1.2 billion in losses during the final quarter of 2025, as the company shifted its strategy on electric vehicle production.
The $4.8 billion in losses recorded for the full year of 2025 were $300 million below those reported a year earlier.
The company attributes it to a slight improvement in structural costs and a shift from high-end, large trucks in North America to small, electric cars in Europe.
Ford forecasts its EV business will incur between $4 and $ 5 billion in losses in 2026, with Chief Financial Officer (CFO) Sherry House reaffirming that they don’t expect ‘Model e’ to turn profitable until 2029.
Late last year, the Detroit automaker warned of a $19.5 billion loss after having to restructure its EV strategy due to US policy shifts and rising demand for gasoline-powered vehicles.
The company is betting on its Universal EV Platform to drive its electric vehicle business from 2027 onward.
Ford announced last August that it is investing “approximately $5 billion” to develop a midsize electric pickup truck priced around $30,000 — significantly below the entry-level price of the F-150 Lightning, which was cancelled late last year despite its market lead in the segment.
Additionally, it is partnering with local companies in overseas markets, including Renault and Volkswagen in Europe.
According to the CEO Jim Farley, the automaker is “very focused on using Renault‘s platform, especially their B-sized EV, to dramatically reduce our costs and improve the profitability of our EV business in Europe.”
Shift from High-End EVs
Late last year, Ford announced it would permanently discontinue production of its flagship the F-150 Lightning, signaling a shift to hybrid models.
After the EV tax credit deadline expired on September 30, “the last couple of months have been really clear to us,” the CEO said, before flagging a 5% shrink in the EV market.
However, Farley highlighted that “more importantly, the very high-end EVs, the $50,000, $70,000, $80,000 vehicles, they just weren’t selling.”
The fully electric F-150 achieved a 2.2% share of the total US vehicle market in the third quarter, boosted by a demand increase ahead of the federal tax termination.
Even as Ford‘s EV sales halved in the fourth quarter, the F-150 Lightning remained a market leader in the electric pickup segment, placing above Tesla‘s Cybertruck and GM‘s trucks.
In the full-year 2025, and despite the demand surge in the third quarter ahead of the EV credit deadline, Ford saw electric vehicle sales tumble 14.1% compared to 2024.
The US brand recorded its fourth straight year-on-year decline in monthly EV sales in January, with a 69% plunge to just 1,743 units.
The EV business restructure also affected battery production, which Ford had started in Louisville, through its partnership with South Korean manufacturer SK On.
Ford will now focus on battery energy storage systems (BESS), an area where competitor Tesla is well distinguished.
Last month, the company appointed Lisa Drake as the new President of Ford Energy, which will handle the battery storage business unit.
2025 Financial Results
Ford reported revenue of $187.3 billion for full-year 2025, a 1% increase from the previous year.
However, the company posted a net loss of $8.2 billion, reversing from a net income of $5.9 billion the year before.
In the fourth quarter alone, $11.1 billion losses were recorded.
The company faced higher tariff charges than expected as a government relief programme for car-part imports was applied retroactively only from November and not from May as Ford had assumed.
As a result, total tariff-related costs for the year reached $2 billion, and the company expects to incur similar costs again in 2026.
Its adjusted EBIT came in at $6.8 billion, down 33% year over year, showing a decline in operating profitability.
Ford is targeting an adjusted EBIT of $8–10 billion in 2026, with the first quarter EBIT figures being “roughly flat sequentially.”
According to the CFO, the company will “continue to work through the impact of Novelis,” expecting to “approach a more normalized EBIT in the second quarter.”
They plan “to hit our underlying EBIT run rate level in the second half as volume stabilizes and our portfolio optimization takes hold,” Sherry House said.
Ford is expecting adjusted free cash flow of $5 billion to $6 billion, and capital expenditures of $9.5 billion to $10.5 billion.
