Automotive major Ford has reported 35 percent drop in revenue at its electric vehicle (EV) business to $3.9 billion in 2024.
Ford Model e Segment, Ford’s EV business, has shipped 105,000 electric vehicles in 2024 as compared with 116,000 in 2023.
Ford is grappling with significant losses in its electric vehicle (EV) and software operations, projecting up to $5.5 billion in losses for the year. This reflects the ongoing challenges of reducing costs associated with producing battery-powered models.
Despite forecasting profitability for 2025, it is expected to be lower than in 2024. The company has been affected by quality issues and a declining stock price, which fell 18% last year. Moreover, potential tariffs on materials from Mexico and Canada are a looming concern that could further increase production costs and negatively impact sales.
In response, Ford has made notable cuts to its EV plans, including delaying the launch of its next-generation electric F-150 Lightning truck and scrapping an anticipated three-row electric SUV.
Instead, Ford is focusing on hybrids and collaborating with its California-based team to create affordable electric vehicles, with the first one expected to arrive in 2027. The company continues to see higher sales of hybrids compared to EVs, with nearly double the number of hybrids sold compared to EVs last year.
Ford’s multi-powertrain strategy, which includes a mix of hybrids and EVs, is intended to cushion the impact of the phase-out of the federal EV tax credit. The company’s financial outlook for 2025 includes lower earnings before interest and taxes (EBIT) projections, with the Model E segment alone expected to experience a $5.5 billion loss.
Despite these challenges, Ford has been making progress with cost reductions, saving $1.4 billion, and continues to make investments in future EV models and battery plants. However, a tougher pricing environment and potential tariffs remain as significant risks for the year ahead.
Ford faces increasing competition in the electric vehicle (EV) market from several key players, notably General Motors (GM), Tesla, and various emerging EV startups, Reuters news report said.
GM is aggressively rolling out new models, including the Blazer and Equinox EVs, while Ford is taking a more cautious approach, focusing on hybrid models and delaying new EV releases. Tesla, as the market leader, continues to dominate with its established lineup of EVs and strong brand recognition. Tesla maintains a technological edge, particularly with its battery technology and software integration.
Other rivals, including startups like Rivian and Lucid Motors, are also vying for market share, with unique offerings such as Rivian’s electric trucks and Lucid’s luxury sedans. Ford has been forced to adjust its strategy to stay competitive, focusing on improving its EV lineup, particularly with the upcoming mid-sized electric pickup from its California team in 2027. Despite its focus on hybrids, Ford’s more diversified approach to powertrains could give it an advantage over competitors like GM, which has fully committed to an all-electric future by 2035.
Baburajan Kizhakedath