Ford’s EV Business Faces Steep Losses in 2024, With More Challenges Ahead
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Ford’s electric vehicle (EV) and software division reported a staggering $5.1 billion loss in 2024, an increase from the $4.7 billion lost the previous year. And the challenges aren’t over—the automaker anticipates losses of up to $5.5 billion in 2025 as it continues to navigate a volatile EV market.
Ford’s Financial Performance: Profits in Gasoline, Losses in EVs
Despite significant EV losses, Ford’s traditional gas-powered vehicles remain profitable, allowing the company to report a full-year net income of $5.9 billion and adjusted earnings of $10.2 billion in 2024. The company also noted $1.4 billion in cost improvements from its Model e division.
However, Ford has acknowledged “headwinds related to market factors,” indicating that its earnings may drop by $2 billion or more in 2025. This decline is attributed to costly new vehicle launches and falling car prices, further pressuring the company’s financial outlook.
External Economic and Political Factors Impacting Ford’s EV Strategy
Ford’s financial projections do not currently factor in potential cost increases from President Donald Trump’s proposed 25% tariffs on imports from Mexico and Canada. Although these tariffs have been temporarily paused for a month, they could have significant long-term effects. Ford CEO Jim Farley warned that prolonged tariffs would lead to “billions of dollars of industry profits wiped out,” affecting U.S. jobs and leading to “higher prices for customers.”
Additionally, the potential rollback of Biden-era EV incentives, such as tax and manufacturing credits, could further challenge Ford’s ability to make its EV business profitable.
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| FORD Hybrid - Credit -- ARENA EV |
Ford vs. General Motors: A Competitive Disadvantage?
Ford is struggling to keep up with competitors like General Motors (GM) in the EV space. While GM launched several new electric models in 2024, including Chevy and Cadillac EVs, Ford’s lineup remains limited to just three battery-electric vehicles. Unlike GM’s EV business, which is showing signs of profitability, Ford continues to experience setbacks, including the recent cancellation of an electric three-row SUV.
Ford’s Future EV Strategy: More Options, More Range
Looking ahead, Ford is diversifying its vehicle lineup by introducing a variety of powertrains, including:
Battery-electric vehicles (BEVs)
Plug-in hybrids (PHEVs)
Extended-range EVs (EREVs) powered by small gas engines to recharge the battery, offering up to 700 miles of range
These vehicles will be built on flexible body-on-frame and unit-body platforms, designed to accommodate multiple energy sources.
Conclusion: Can Ford Turn Its EV Business Around?
As Ford grapples with mounting losses, strong competition, and shifting market dynamics, the road ahead remains challenging. The automaker’s ability to balance its gas-powered success with its struggling EV division will be crucial in determining its long-term profitability in the evolving automotive industry.
Stay tuned for more updates on Ford’s EV strategy and industry trends.