On Monday, Dec. 15, Ford formally waved the white flag.
The Blue Oval introduced that it’s taking a $19.5 billion pre-tax write-down on its electrical car division over the subsequent two years because it shifts manufacturing away from EVs and towards hybrid and extended-range autos.
Ford shares have been up 2% in early market buying and selling Tuesday, Dec. 16, on the information.
Ford Mannequin e losses by 12 months
- 2025: $3.6 billion (via the third quarter)
- 2024: $5.1 billion
- 2023: $4.7 billion
- 2022: $2.2 billion
At a time when most conventional unique tools producers nonetheless withhold the numbers, Ford broke out its Mannequin e EV division in March 2022, laying its funds naked within the course of.
Whereas buyers commend the transparency, the outcomes haven’t been fairly.
Mannequin e misplaced $1.4 billion within the third quarter alone, and thru the primary three quarters, it has misplaced $3.6 billion to date this 12 months.
Ford attributed about $3 billion of these losses to its first-generation EV merchandise, together with the Mach-E, F-150 Lightning, Puma, Explorer, and Capri. The remainder is from investments in its next-generation EVs.
“The really high-end EVs, the $50k, $60k, $70k EVs just weren’t selling,” CEO Jim Farley stated in an interview Dec. 15.
The $19.5 billion (solely $5.5 billion of which is money costs, the remaining is non-cash) announcement is as soon as once more a win for transparency, however the firm has been signaling that Mannequin e hasn’t been working for years.
Two years in the past, Ford introduced plans to scale back its EV manufacturing capability by 35%.
Ford admits it has misplaced $19.5 billion on its electrical autos.
Picture by jetcityimage on Getty Photos
Ford pivots to autos that People “want to buy”
Constructing electrical autos is comparatively straightforward. The know-how has been round for over 100 years.
Promoting them to People who need to purchase them has been the problem.
Ford’s complete U.S. gross sales by 12 months:
- 2024: 2.08 million autos bought, +4.2%
- 2023: 1.99 million autos bought, +7.1%
- 2022: 1.77 million autos bought, -2.2%
- 2021: 1.9 million autos bought, -6.8%
Supply: Finest-Promoting Automobiles
Even a top-of-the-line EV firm like Tesla took years to turn into worthwhile. Tesla first turned a revenue in 2020, and though it has maintained this revenue since, it noticed a 52% decline in earnings in 2024 and will expertise one other decline this 12 months as its market share decreases.
Ford CEO Jim Farley estimates that EVs have shrunk to simply about 5% of the U.S. market, so the plan is to pivot to hybrids and extended-range autos for which U.S. consumers have proven extra of an urge for food.
Ford expects to have half of its output be hybrids or EREVs by 2030, up from 17% at the moment.
Associated: Ford CEO Jim Farley has a stark warning for Europe
Farley defined that whereas the corporate ranks third within the nation in hybrid gross sales, it leads in truck hybrids, representing roughly 80% of the market share.
Ford’s total Q3 gross sales have been flat, however hybrid gross sales jumped 20% through the interval.
Regardless of the pivot, Ford does not sound prefer it’s utterly abandoning its EV division. The corporate will as an alternative deal with smaller EVs that shall be priced at $30,000 and underneath.
Farley says pivoting for spending billions on EVs to spending billions on HEVs and EREVs will present a “pathway to profitability” for Mannequin e.
Ford CEO takes delicate shot at Cybertruck whereas saying finish of F-150 Lightning
Japanese automaker Toyota is already the place Ford desires to be with hybrid electrical gross sales.
For the third quarter, Toyota North America reported gross sales of over 629,137, a 16% year-over-year improve. Gross sales of electrified autos jumped 10.5% within the quarter to 282,794. Electrified autos (principally hybrids) accounted for 45% of Toyota’s North American gross sales quantity.
Associated: EV leaders in Europe return fireplace towards Ford, Stellantis stress marketing campaign
To reach the place Toyota already is, Ford is discontinuing the F-150 Lightning EV, as an alternative shifting to an extended-range hybrid model.
Lightning was clearly one in all Farley’s favourite tasks, because it married Ford’s hottest product, the F-150, with what it expects to be the way forward for automotive journey.
“The U.S. is really different. Here, people travel over longer distances. They use their trucks for towing. And these really expensive $70,000 electric trucks, as much as I love the product, they don’t make sense,” Farley stated.
Lightnings begin for underneath $60,000; in the meantime, Cybertruck begins at about $72,000, based on Automotive and Driver.
Lightning and Cybertruck had turn into a degree of competition for Jim Farley and Tesla CEO Elon Musk.
The F-150 is by far Ford’s hottest car, and when Musk launched the Cybertruck, a part of the advertising marketing campaign was that it was superior to the F-150 in each manner.
The Lightning was Ford’s response (although the Lightning got here out earlier than the Cybertruck), however neither car has bought nicely.
Tesla’s Cybertruck outsold the Lightning in 2024 by a margin of 39,442 models to 33,510. However EV.com studies that the Lightning has reclaimed the highest spot in 2025, amid an enormous Cybertruck recall and falling gross sales for each autos.
Stories emerged earlier this 12 months that the F-150 experiment was coming to an finish. Ford paused manufacturing of the F-150 Lightning in October as a result of an aluminum scarcity.
Ford has the capability to construct 150,000 Lightnings a 12 months.
“Being number two to Tesla in EVs, we’ve learned a lot the last three years. And
having a full range of truck hybrids, we’ve learned a lot…. And there’s no doubt about it that we’ve had to change our EV spending and capital allocation pretty massively,” Farley stated through the firm’s second-quarter earnings name.
Associated: Tesla has extra dangerous information for Cybertruck lovers
