Ford Cuts Its EV Losses, But Sets Its EV Transition Back

Ford is killing the F-150 Lightning and US E-Transit models. No mention was made of the Mustang Mach E, but I wouldn’t get your hopes up too much. The market responded by increasing its share price. While it is discouraging to those of us supporting clean technology, the move made more sense when looking at its financials.

Looking at Ford’s numbers from 2022 to 3Q 2025, it lost roughly $15.6 billion on its EV business, while selling a little over 300k EVs. That works out to be over $50k in losses per vehicle sold. These sales were supported by the Federal $7500 tax credit. Those kinds of losses can be seen as acceptable for the early years of a startup, but they are not sustainable in an increasingly mature market. It should be noted that those losses do not include the $5.4 billion “market-to-market” loss on Ford’s investment in Rivian in 1Q 2022 or the $7.3 billion write-down announced in January 2023 prior to selling its remaining stake. And it does not include the $19.5 billion in recently announced charges.

While Farley is blaming the consumer for the shift, the company’s other justification for selling money-losing EVs is that they allowed Ford to sell profitable ICE vehicles. If it didn’t have its own EVs, Ford would have had to spend billions more to buy credits from other EV makers. However, the Turmp administration revoked California’s waiver to set its own emissions rules, killing the ZEV mandate in the process. And Trump recently gutted CAFE regulations, with Farley standing in support. Ford is not the victim here. The policy changes removed the regulatory business value.

Ford mentioned that it would be shifting battery production to make Energy Storage Systems (ESS), which should make financial sense. The 45X Battery Production Tax Credit and associated supply chain subsidies that persist under Trump add up to roughly the total price per kWh that CATL charges for complete ESS batteries for in China. Of note, Ford’s LFP batteries are made under a licensing agreement from CATL. With competition blocked by protectionism and subsidies adding up to the global market price, you would hope that Ford could figure out how to turn a profit.

Overall, Ford hopes that its Model E business will become profitable by 2029. Some of this is due to shifting the cars included in this division to be primarily “electrified” hybrids and PHEVs rather than full BEVs. In Europe, Renault will fill the EV gaps in their lineup, and JVs will play a similar role in China. However, Ford also claims that its future “Universal EV” platform is aiming to reach cost estimates for a BYD vehicle that it benchmarked. That is an ambitious goal, although by the time Ford launches its platform, BYD will be a generation or two ahead of what Ford originally benchmarked.

Speaking about China, it is illegal for automakers to sell vehicles at the kind of losses that Ford does, with intensifying crackdowns. It should be mentioned that the leading EV makers in China are solidly gross profitable, and the majority of sales are from net profitable companies. However, the crackdown will weed out underperformers, creates greater price transparency and provides a reference for trade. In comparison, if Ford tried to export money-losing vehicles to gain market share in other markets, it would be considered “dumping.”

Ford’s decision is disheartening. Its shift to hybrids mirrors Toyota’s approach. While it should reduce fuel consumption and emissions somewhat versus pure ICE, it is a setback for the transition to fully electrified transportation. And it insulates it somewhat from a potential return of CAFE regulations under a new administration.

With their political connections, Ford is not in immediate danger of failure. Policies will seek to block global competition, and bailouts will happen if it gets too bad. That will only change if the consumers that Ford is blaming now demand better. In the meantime, Ford’s recent backtracking on EVs is a reality check. Automakers need a business plan to compete and be profitable. However, with the rest of the world accelerating in the technological transition, the window to figure that out is closing — especially in a closed market where competition and collaboration are hindered. That situation props the status quo in the short term but makes it harder to meet world-class standards in the long term. As Steve wrote: “irrelevancy looms” for the US auto industry.