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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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. | 9.27 | 0.00 | 0.00% |
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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Ford’s announcement comes after automakers’ EV initiatives struggled in 2024 amid sluggish consumer demand compared to past expectations and increasing pricing pressures from rivals.
General Motors does not report its electric division’s sales and financial figures separately like Ford does, but GM executives said that its EVs became “variable profit positive” last year by generating more in sales revenue than it spent on labor and material costs. However, that figure does not include fixed costs like building assembly lines.
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GM fell short of its goal for producing and wholesaling 200,000 EVs in North America in 2024, ending up at 189,000 units, GM CFO Paul Jacobson said last week.
Last year, Toyota announced that it would postpone its plans to build EVs in the U.S. until 2026 after it previously targeted late 2025, according to a Reuters report.
Volvo in September dropped its plan to go all-electric by 2030, as the Swedish automaker now plans to still have hybrid vehicles in production at that time.
Luxury automaker Bentley announced in November it would push back its plan to transition to a lineup of only battery-electric vehicles from 2030 to 2035, adding that it will continue to manufacture plug-in hybrid vehicles until that time.
Reuters contributed to this report.
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