Ford Explorer electric cars stand in the hall at the start of production.
Ford Motor on Wednesday projected up to $5.5 billion in losses on its electric vehicle and software operations this year, a loss similar to last year and a sign of the severe difficulties in cutting costs on battery-powered models.
The automaker forecast overall profitability for 2025, but even that was lower than in 2024. For the fourth quarter, it reported a net profit of $1.8 billion, up from a loss of $500 million in the year-ago quarter as pension-related costs weighed on results.
The company’s shares dropped 5% in after-market trading.
These EV headwinds come as Chief Executive Jim Farley aims to follow a choppy 2024 with more consistent results, in a year that is already set to be marred by swings in U.S. policy.
The Dearborn, Michigan, automaker is working to overcome persistent quality issues and lift its stock price which declined by 18% last year. It now faces uncertainty around U.S. President Donald Trump’s threatened tariffs on Mexico and Canada. If implemented, the measures would boost the automaker’s raw material costs and likely hurt sales demand.
“There is no question that 25% tariffs on Mexico and Canada would have a major impact on our industry,” Ford’s incoming chief financial officer, Sherry House, told reporters on Wednesday. “That said, we believe the Trump administration intends to support the American auto industry.”
The company’s fourth-quarter revenue of $48.2 billion surpassed analyst expectations of $43 billion, according to LSEG data. Adjusted earnings per share of 39 cents also beat analyst forecasts of 33 cents per share.
Farley made some significant cuts to the company’s EV plans last year, axing a much-anticipated three-row electric SUV and delaying the launch of its next generation electric F-150 Lightning truck. The company is leaning heavily on its California “skunkworks” team developing EVs from the ground up, and said the first affordably priced vehicle from that team will be a mid-sized electric pickup arriving in 2027.
While Ford is not rolling out new EVs in the coming year, a contrast to General Motors which is introducing a blitz of new models and ramping up sales of its Blazer and Equinox EVs, Farley is leaning heavily on hybrids, which GM is not rolling out until 2027.
House said that Ford’s EV losses include significant investment in future models, and it is also increasing volume while cutting costs by $1.4 billion.
Ford sold roughly double the number of hybrids compared with its EVs last year, with 187,426 hybrids sold and 97,865 EVs.
The company projected lower earnings before interest and taxes of $7.0 billion to $8.5 billion for 2025. It met its annual guidance for 2024 after narrowing it late last year, recording annual EBIT of $10.2 billion.
Tariff Turmoil
Ford is the first major automaker to report earnings since Trump signed an executive order on Saturday stating that the U.S. would impose 25% tariffs this week on goods from Mexico and Canada, which would affect Ford as well as cross-town rivals GM and Stellantis. However, Trump delayed the decision for a month after discussions with each country’s leader.
The automaker did not factor in tariffs to its annual outlook, executives said.
Tariffs on Mexico would affect Ford’s popular Maverick pickup truck, one of its most affordable vehicles, the Bronco Sport, as well as the Mustang Mach-E SUV, which are assembled in Mexican plants. Analysts have said of the Big Three Detroit automakers, Ford is the least exposed to tariffs. GM and Stellantis produce more profit-rich vehicles outside the United States.
Last month, Executive Chair Bill Ford told reporters that Trump called him “out of the blue.”
“He understands the importance of our industry and of Ford in the industry,” Bill Ford said, referring to Trump. The Ford chairman added that he was “very confident that Ford will have a voice, and a seat at the table.”
