Ford stock plummeted after the company reported its electric vehicle division had lost a whopping $5.1 billion in 2024.
The automaker’s forecast for 2025 isn’t looking any better, with losses expected to range between $5 billion and $5.5 billion. Investors are rattled and Wall Street isn’t happy.
Ford’s Earnings Report: A Mixed Bag
Though Ford did manage to beat Wall Street expectations on revenue and earnings per share in Q4, the future does not look that bright. Revenue came in at $48.2 billion, up 5% year-over-year, with an EPS of 39 cents. But it’s the downward trajectory of its EV segment that’s stealing the headlines.
Jim Farley’s Warning on Tariffs
CEO Jim Farley didn’t mince words regarding the consequences of tariffs on auto manufacturing proposed by the Trump administration. He said a possible 25% tariff on vehicles imported from Canada and Mexico will “wipe out billions in industry profits” and lead to higher prices for customers. This is another uncertainty added to Ford’s future.
Why Ford’s EV Strategy Isn’t Working
In recent years, the EV market has turned into a brutal fight, with companies trying to undercut each other’s prices. The Model e division was supposed to be Ford’s electric future; it is now turning out to be its financial black hole. With Tesla, Rivian, and Chinese manufacturers like BYD pricing their EVs aggressively, Ford is having a hard time keeping up.
Ford’s Stock Down More Than 6%
Stocks of Ford tumbled more than 6% in early trading Thursday, with the market reacting swiftly. In the last one year, the automobile manufacturer has eroded over 20% of its market value due to increasing investor concerns over its EV strategy and uncertainty related to global trade.
Ford sits at a fork in the road: billions are being poured into the development of EVs, while the returns just aren’t coming in fast enough. With increasing losses, stiff competition, and now possible tariffs as well, tough choices lie ahead for the automaker.
Ford’s EV ambitions have become an expensive experiment, and investors are running out of patience. What Ford urgently needs is a game-changing strategy to prevent things from going further downhill in the market’s confidence. All eyes will be on what comes next for Ford as it navigates the turbulent 2025.
