Ford is expecting mounting EV losses this year
Boyden Gray PLLC partner Michael Buschbacher discusses concerns of an electric vehicle mandate on The Bottom Line.
Ford Motor Co. announced its fourth-quarter earnings this week, and while they came in above expectations, the Detroit automaker signaled the losses in its electric vehicle (EV) division are projected to continue this year.
Ford reported that its EV division, known as Model e, lost $5.1 billion in 2024. In its full-year outlook for 2025, Ford said that it expects adjusted earnings before interest and taxes (EBIT) of $7 billion to $8.5 billion, with free cash flows between $3.5 billion and $4.5 billion and capital expenditures between $8 billion and $9 billion.
When Ford broke down its various segments, it noted an EBIT loss of $5 billion to $5.5 billion for Model e. That is offset by positive EBIT of $7 billion to $8 billion from Ford Pro and $3.5 billion to $4 billion from Ford Blue, as well as earnings before taxes of $2 billion from Ford Credit.
“We expect a loss of $5 billion to $5.5 billion for Ford Model e, holding losses stable year over year,” said Sherry House, Ford’s incoming chief financial officer who is currently a vice president of finance at the company. “While industry pricing pressure remains, we plan to materially increase our global volume, driven by the full-year impact of European launches, and we significantly increased investment in our battery facilities and next-generation products, which are just two years away.”
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Ford’s EV division, known as Model e, is projected to lose about $5 billion in 2025. (Alex Kraus/Bloomberg via Getty Images / Getty Images)
In response to a question from a financial analyst, House noted that while Ford Model e’s volumes are up, there are about $1 billion in additional costs related to its BOSK battery factory and engineering for its generation 2 EV products.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 9.24 | -0.03 | -0.27% |
House went on to discuss some of the factors putting pressure on the division, as well as some positive developments at the end of last year.
“Some of the downward pressure that you continue to see, that’s on the pricing potentially in Europe, potentially in North America,” she said. “What’s been great though is Model e as it ended Q4 last year, the [Mustang] Mach-E, we had fantastic selling – over 30% increase quarter over quarter, and we stayed above the average transaction prices. So, while we’re seeing the pressure, we have been continuing to do well even with our Gen-1 products in our sales pace.”
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The All-Electric Ford Mustang Mach-E surpassed the traditional Mustang in sales last year. (Josh Lefkowitz/Getty Images / Getty Images)
Ford’s announcement comes after automakers’ EV initiatives struggled in 2024 amid sluggish consumer demand compared to past expectations and increasing pricing…