Ford Faces Record Loss as Electric Drive Stumbles
Ford's latest earnings reveal a significant setback, with a net loss of $8.2 billion for 2025—the worst since the 2008 downturn.
EV Arm Takes a Major Hit
The majority of the loss comes from Ford's electric vehicle (EV) division, which posted a $4.8 billion loss this year. Sales of EVs plummeted after the U.S. government cut a $7,500 federal tax credit, which had previously boosted early adoption.
Shift in Strategy
Due to this setback, Ford has announced a shift from full electrification to partial electrification and has cancelled the electric F-150 Lightning pickup.
Grim Outlook Ahead
Executives predict another $4–$4.5 billion loss in 2026 and expect to break even only around 2029.
New Strategy: Cheaper Cars and Autonomous Tech
Without the tax credit, Ford is focusing on two key areas:
- Cheaper EVs: A $30,000 EV with hands-free driving is slated for release in 2028, undercutting Tesla’s affordable models, which start above $36,000 without the credit.
- Autonomous Technology: Investing heavily to stay competitive.
Global Market Challenges
Overseas markets present a different picture. Chinese EV makers, backed by generous subsidies, can sell vehicles at low prices and dominate global sales. In fact, BYD topped Ford’s worldwide vehicle count in 2025 for the first time.
To stay competitive, Ford is exploring a partnership with China’s Geely, according to recent reports.
Additional Challenges
The loss was not solely due to the tax cut. A tariff change at the end of last year meant Ford received less relief, doubling its tariff costs to $2 billion.
CEO’s Hope for Policy Stability
Despite these challenges, the CEO remains hopeful that policy stability will improve in 2024, especially with new emission standards.
