Ford Motor Company has unveiled a major reset of its electric vehicle strategy, signaling a shift from expensive flagship EV programs toward affordable mass-market models and hybrid expansion as it navigates slower demand and mounting losses.
During its Q4 and full-year 2025 earnings call, Ford confirmed that electric vehicles remain central to its long-term future, but the company is fundamentally changing how it invests, builds, and monetizes its EV portfolio.
Ford Model e losses highlight EV transition challenges
Ford’s dedicated EV unit, Model e, continues to post significant losses as the company restructures its product roadmap.
The EV segment recorded a full-year 2025 EBIT loss of $4.8 billion, improving slightly from a $5.1 billion loss in 2024. However, the financial reset included $19.5 billion special charge in the fourth quarter, largely tied to cancelled EV programs and asset write-downs that no longer fit Ford’s revised strategy.
Revenue pressure is also intensifying. Model e revenue fell 9 percent year over year in Q4 as pricing competition increased and demand cooled for early-generation pure EV models.
These results underline the broader industry reality that first-generation EV programs are proving more expensive and less profitable than initially expected.
Ford pivots to a Universal EV Platform focused on affordability
CEO Jim Farley emphasized that Ford is redeploying capital toward a more sustainable EV roadmap built around affordability and scale.
At the center of the shift is a new Universal EV Platform designed to support high-volume vehicles priced between $30,000 and $35,000. The company believes this segment represents the most viable path to long-term EV profitability.
As part of this pivot, Ford cancelled several capital-intensive programs, including:
A planned three-row electric SUV
The next-generation full-size electric F-150
Ford said the business case for these larger vehicles weakened due to high production costs and changing market demand.
Extended-range EVs emerge as a key bridge technology
Ford is also betting heavily on Extended-Range Electric Vehicles (EREVs), which combine battery-electric propulsion with a small gasoline engine acting as a generator.
The company highlighted an upcoming electric truck with more than 700 miles of range and strong towing capability, positioning EREVs as a practical solution for customers who need long-range performance but remain hesitant about full EV adoption.
This technology is expected to serve as a transitional bridge between hybrids and fully electric vehicles.
Hybrids become Ford’s stability engine
As pure EV growth moderates, Ford’s hybrid lineup is becoming a major pillar of its electrification strategy.
Global hybrid sales rose 25 percent year over year in 2025, reinforcing the company’s “Power of Choice” strategy that offers multiple electrified options to customers.
By 2030, Ford expects hybrids, EREVs, and EVs to account for 50 percent of global vehicle volume, up from 17 percent in 2025. This shift highlights a more balanced electrification roadmap that prioritizes profitability alongside emissions reduction.
Ford Energy targets battery storage and data centers
Ford is expanding beyond vehicles with the launch of Ford Energy, a new business unit focused on battery energy storage systems.
The company plans to supply energy storage solutions to infrastructure projects and the fast-growing data center market. Ford aims to begin shipping systems in 2027 with annual capacity of 20 GWh, using underutilized EV battery production capacity.
This move positions Ford to diversify revenue while leveraging its battery investments.
EV profitability pushed to 2029
Ford expects Model e losses to continue in the near term, forecasting a 2026 loss between $4.0 billion and $4.5 billion. The company anticipates roughly $1.6 billion in savings from first-generation EV cost reductions, partially offset by startup costs for new EV programs and Ford Energy.
The company now targets EV profitability by 2029, with incremental improvements expected each year starting in 2026.
Ford confirmed it remains on track to begin producing LFP battery cells in 2026 through its partnership with CATL, which will power upcoming midsize electric trucks.
A reset aimed at sustainable EV growth
Ford’s strategic reset reflects a broader industry shift toward affordability, hybrid adoption, and disciplined capital spending. By focusing on lower-cost EVs, expanding hybrids, and entering the energy storage market, Ford is attempting to build a more resilient path toward long-term electrification and profitability.
BABURAJAN KIZHAKEDATH