Ford’s electric vehicle business lost nearly $5 billion last year — and CEO Jim Farley says the company got the message.
“So I think the customer has spoken. That’s the punchline,” he said during Tuesday’s earnings call.
Ford’s EV unit posted a $4.8 billion loss in 2025, as sales of its Mustang Mach-E, F-150 Lightning, and E-Transit fell 14% from a year earlier.
Now, the automaker is reshaping its electric strategy — shifting toward lower-cost, high-volume EVs and leaning harder into hybrids. It’s a reversal of Ford’s early strategy of electrifying its most iconic, priciest vehicles first, betting that brand loyalty and subsidies would offset sticker shock.
A bet that didn’t pan out
Ford was one of the earliest legacy American automakers to directly challenge Tesla with mass-market EVs.
The Mustang Mach-E arrived in December 2020 as a rival to the Tesla Model Y. In mid-2022, Ford launched the F-150 Lightning.
On paper, the bet was simple: electrify the century-old carmaker’s two most iconic nameplates to leapfrog EV startups.
Early enthusiasm was strong. Ford said it received nearly 200,000 reservations for the Lightning and projected annual sales of 150,000 units.
That early momentum faded — and never materialized into the high-volume sales Ford was hoping for.
In 2025, Ford sold 27,307 F-150 Lightnings — down 18.5% from 2024 — and 51,620 Mustang Mach-Es, roughly flat year over year.
Sales figures were even more stark after the $7,500 federal tax credit ended last September. The F-150 Lightning’s estimated sales dropped from 5,197 units in December 2024 to just 1,724 a year later, according to Ford Authority.
Meanwhile, US EV sales declined while hybrid demand climbed. For example, Ford sold 84,934 hybrid F-150s last year, a 15% increase.
So, the company is switching up its plans.
The company has since ended production of its all-electric F-150 Lightning. It will return at an undisclosed time as an extended-range electric vehicle, or EREV — a battery-powered truck with a gas generator onboard.
Ford expects the new model will have improved range and increased towing capacity, both of which were concerns for early F-150 Lightning adopters.
“We’re betting on hybrid across our lineup, and EREV where it makes sense,” Farley said during the call. “Like a large truck, where towing is a really important application, and both PHEV (plug-in hybrid-electric vehicles) and pure electric will definitely not work.”
A new all-electric plan: cheaper EVs
At the same time, Ford is developing a new “universal” EV platform designed for lower-cost, high-volume vehicles.
The first model — a roughly $30,000 midsize pickup — is expected in 2027. Ford plans to build at least five vehicles off the platform, potentially including SUVs and commercial vans.
“We aren’t just building compliance vehicles at Ford. We’re launching a cost-efficient, universal EV platform that will drive profitable growth,” Farley added. “Tesla’s shown that they could, we can make money in that market, even without subsidy from the government at the right cost level.”
It follows a trend in the auto industry. Other major automakers — including Toyota, Subaru, Rivian, Nissan, and Chevrolet — are planning launches for sub-$50,000 EVs this year.
Still, Ford expects its EV business to remain in the red for several more years. CFO Sherry House said the company is targeting break-even for the segment around 2029.
Investors have taken a cautious view of the company’s long-term financial health. Ford missed earnings estimates for the quarter, reporting 13 cents adjusted estimated earnings per share versus analysts’ estimates of 19 cents.
“On paper, it’s a big miss, but I don’t think it’s a big deal,” John Rosevear, a contributing analyst at The Motley Fool, told Business Insider. “Ford’s guidance for 2026 anticipates nice year-over-year increases in cash flow, as well as higher capital expenditures — all stuff that the market will almost certainly like.”
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