Automotive
Ford’s electrification push is proving to be a costly endeavor, with its Model e division expected to lose between $5 billion and $5.5 billion in 2025. That’s an even steeper deficit than the $5.1 billion loss reported for 2024, underscoring the financial strain associated with building electric vehicles (EVs) at scale. Despite the setbacks, Ford remains committed to the EV market, albeit with a more strategic and measured approach.
EVs Remain a Costly Gamble for Automakers
The road to EV profitability has been long and arduous for the entire industry. Tesla, now the world’s leading EV brand, didn’t post its first profitable year until 2020. General Motors, after years of heavy investment, only recently began making money on EVs. Ford, like many legacy automakers, has found that the high cost of battery production remains a significant barrier to profitability.
Even with its Model e division losing billions, Ford managed to increase EV sales by 34.8% in 2024, delivering 97,865 units in the U.S. However, the real workhorses of its lineup were hybrid and gas-powered vehicles. Hybrid sales surged by 40.1% to 187,426 units, while traditional combustion-engine vehicles remained dominant, accounting for 1,793,541 sales. This shows that while demand for EVs is growing, gas and hybrid models still generate the bulk of Ford’s revenue.
Challenges With Large EVs and Towing
Ford CEO Jim Farley recently acknowledged one of the biggest hurdles facing large electric trucks and SUVs: physics. During the company’s 2024 financial results call, Farley admitted that big EVs have “unresolvable” issues, particularly when it comes to towing. Unlike gas or diesel trucks, electric trucks require massive batteries to maintain range while pulling heavy loads, but those same batteries add significant weight and reduce efficiency.
It’s a tough reality for Ford, given that its F-Series has been America’s best-selling truck for 47 consecutive years. The F-150 Lightning has enjoyed some success, but it’s clear that fully electric trucks still have major limitations for buyers who depend on them for heavy-duty work.
A Shift in Strategy: Delays, Cancellations, and New Approaches
Ford is recalibrating its EV roadmap in response to market realities. The company has delayed its next-generation midsize electric pickup to 2027—about 18 months later than initially planned. Additionally, Ford scrapped its three-row electric SUV project, which was originally set to debut in 2027, after determining it wouldn’t be profitable within the first 12 months of launch. That decision alone cost the company $1.9 billion.
Instead of rushing new EVs to market, Ford is focusing on a more adaptable strategy. The company is developing multi-energy platforms that can support both combustion and electric powertrains, allowing for greater flexibility in a fluctuating market. This approach enables Ford to hedge its bets, ensuring it isn’t fully reliant on EVs in case demand stagnates.
Cheaper EVs and Range-Extended Hybrids in the Future
Ford is also working on more affordable EVs to compete with Tesla and Chinese automakers. A dedicated “skunkworks team” is developing a low-cost EV platform, but these models aren’t expected to hit the market until 2027. In the meantime, Ford is exploring extended-range electric vehicles (EREVs), which use a gas engine as a generator to recharge the battery. This setup, similar to what Mazda employs in the MX-30 R-EV, could help alleviate range anxiety while still offering an electric driving experience.
While Ford’s EV losses are mounting, the automaker isn’t backing away from electrification. Instead, it’s refining its strategy to ensure long-term sustainability. By focusing on cost-cutting, hybrid technology, and flexible platforms, Ford aims to navigate the challenges of the EV transition while maintaining its stronghold in the truck and SUV markets.
Whether this approach will be enough to turn a profit remains to be seen, but one thing is clear: Ford is in it for the long haul.
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