UBS analyst Joseph Spak commented on Ford’s shift toward hybrid vehicles, a day after the company announced a $19.5 billion write-down related to a strategy shift in its electric vehicle lineup.
The firm remains Neutral on Ford‘s stock, with a reiterated price target of $12.50 on the company’s shares.
The target implies a downside potential of 8.4% on the share value, considering Monday’s closing price of $13.65.
On Tuesday, Ford’s shares hit a 1.5-year high of $13.99 in the first hour of trading, before falling back to their opening level.
As of press time, the stock is trading 0.5% higher at $13.73.
$19.5 Billion Write-Down
Ford announced on Monday that it aims for ‘Model e’ to be profitable by 2029, with annual improvements starting in 2026.
However, that will involve about $19.5 billion in one-time charges, mostly in the fourth quarter of 2025.
The remaining charges will be felt in the next two years.
In a new research note — obtained by PriceTarget — Joseph Spak called the write-down a “bold action” that “likely removes years of future losses” for Ford‘s EV unit.
Financial Guidance
The Detroit automaker revised its 2025 financial outlook in October, after it had been temporarily suspended in May, to account for expected supply chain disruptions — including consequences of a fire in a supplier plant in September.
By then, the full adjusted EBIT estimates for 2025 decreased from a range of $7–8.5 billion to $6–6.5 billion.
However, Ford revealed on Monday that is raising its 2025 adjusted EBIT guidance to about $7 billion, citing “continued underlying business strength” and “cost improvement.”
According to the UBS analyst, the “stock could react favorably to the guidance raise and 2026+ Model e commentary,” but there is a lot to digest and many moving pieces.”
Hybrid and EREV Models
Noting that “Ford is not turning away from EVs (BEVs and EREVs),” but rather “using new platforms,” Spak wrote that “the Stellantis Ramcharger [1500] EREV may be an early test of consumer appetite for such a product.”
Previously expected to launch in the first half of 2025, the extended-range vehicle debut was moved back to 2026 late last year, after the company cancelled a fully electric version of the model.
The Ram model’s price is expected to be in the $70,000-$80,000 segment.
Ford‘s F-150 Lightning, which was up until now produced as a fully electric model, will become an EREV as the company focuses on hybrid and internal combustion engine versions of the pick-up truck.
According to CEO Jim Farley, “the very high-end EVs, the $50,000, $70,000, $80,000 vehicles,” in which the F-150 Lightning stood, “they just weren’t selling.”
Energy Storage
Ford also announced on Monday that it is entering the energy storage system (ESS) business, which “will require investment but could end up being a clever repurposing of some assets.”
Spak believes that “there is a supply/demand imbalance” in the ESS business, which provides Ford with “an opening,” as long as they “can execute and use their license, which release seems to indicate.”
The analyst remained cautious, however, stating that the company “will need to show good execution and a continued business case with strong market structure,” in order to justify “committing further capital for growth.”
The most well-known automaker investing in the ESS business is Tesla, which has built a global presence with its Megapack energy storage solutions and grid-scale projects.
