Ford’s electric vehicle division is burning cash. After losing over $5 billion in 2024, the carmaker expects to take another massive hit this year.
Ford is bracing for another tough year in the electric vehicle market, expecting losses of up to $5.5 billion in its EV division for 2025. This follows a $5.1 billion loss in 2024, as the company struggles with high production costs, shifting consumer demand, and rising competition. Despite this, Ford remains committed to its electrification strategy, though it’s taking a more cautious approach.
One of the biggest challenges Ford faces is the increasing competition from Chinese EV brands. CEO Jim Farley has called them a major global force, emphasizing that Ford needs to compete with them directly, rather than relying on tariffs. He specifically mentioned the Xiaomi SU7, an affordable Chinese electric sedan, saying it’s a strong rival Ford must beat “in a street fight.” The SU7, which starts at around $30,000, has already delivered over 135,000 units in 2024, proving that Chinese automakers are making serious gains in the global EV market.
Meanwhile, Ford is also dealing with potential tariffs on Mexico and Canada, which could significantly impact production costs. While a 30-day delay has been agreed upon, if tariffs go into effect, they could add billions in costs for the auto industry. Ford is particularly vulnerable since some of its most popular models—the Maverick, Bronco Sport, and Mustang Mach-E—are built in Mexico. Ford executives have warned that prolonged tariffs could lead to higher vehicle prices and major disruptions.
Despite these challenges, Ford posted a Q4 profit of $1.8 billion, a big turnaround from its $500 million loss the previous year. Revenue for the quarter was $48.2 billion, beating expectations. However, overall profitability for 2025 is expected to be lower than 2024, with projected earnings before interest and taxes between $7.0 billion and $8.5 billion, down from $10.2 billion last year.
To stay competitive, Ford is shifting focus towards hybrid vehicles, which have been selling at nearly double the rate of EVs. In 2024, the company sold 187,426 hybrids compared to 97,865 EVs. Unlike GM, which is going all-in on battery-powered vehicles, Ford is taking a multi-powertrain approach, balancing hybrids, gas vehicles, and EVs to keep costs under control.
One major adjustment in Ford’s EV strategy is delaying the launch of new models. The company scrapped a planned three-row electric SUV due to profitability concerns and has pushed back its next-gen F-150 Lightning. Instead, Ford is relying on its California-based “skunkworks” team to develop cheaper EVs, with the first model—a mid-size electric pickup—expected in 2027.
Ford’s leadership is closely watching policy changes that could impact the auto industry. Executive Chairman Bill Ford recently said he had a direct conversation with U.S. leadership and is confident that Ford will have a seat at the table in discussions about tariffs and EV incentives. CEO Jim Farley also emphasized that any new trade policies should be fair for the entire industry, especially as Asian automakers currently face fewer tariff restrictions.
With an unpredictable year ahead, Ford is balancing its long-term EV strategy with short-term adjustments. By leaning on hybrids, cutting costs, and developing a new lineup of affordable EVs, the company is aiming to weather the storm while positioning itself for the future.
