In a startling twist, Ford’s recent quarterly report echoes echoes from the 2008 recession, revealing an eye-popping net loss of €7.7 billion ($8.2 billion) for 2025. This unfortunate milestone signals deep turmoil within the once-stable automotive giant.
Among the culprits? The electric vehicle division, which burned through a staggering €4.4 billion ($4.8 billion) in 2025.
The battleground for EVs was rocked this year by the Trump administration’s decision to slash the €7,000 ($7,500) federal EV tax credit, originally established under the Biden administration. This move disrupted sales, leaving many companies, Ford included, reeling.
As an early adoptive supporter of electrification, Ford felt the impact acutely, prompting a strategic pivot from full to partial electrification. They pulled the plug on launching the electric F-150 Lightning, once seen as a flagship model. “I think the customer has spoken. That’s the punchline,” stated Ford CEO Jim Farley during the earnings call.
The future also appears grim. Executives project an additional €3.7 billion to €4.2 billion ($4-4.5 billion) in losses for 2026 and anticipate not hitting breakeven until around 2029.
Without a tax credit, Ford and its competitors, including GM, are banking on two strategies: affordability and autonomous driving. Their centerpiece is an upcoming €27,600 ($30,000) electric vehicle, boasting “eyes-off” driving that aims for a 2028 debut.
This price point would position them below Tesla’s current offerings, which start around €33,600 ($36,000), all while still outpacing earlier price points that benefited from the tax incentive.
Yet, the narrative shifts dramatically on foreign shores. Farley pointedly remarked, “How will the Chinese change the game?” While Ford grapples with stagnation, Chinese EV manufacturers capitalize on robust government support, resulting in dangerously competitive pricing. Though barred from U.S. markets, Chinese EVs pose significant threats to American brands, particularly with Canada recently permitting imports.
The fallout of Tuesday’s earnings announcement revealed that BYD, a Chinese powerhouse, surpassed Ford in global vehicle sales for the first time in 2025.
In a bid to stave off this encroachment, Ford is reportedly engaging in talks with Geely for a potential partnership, as highlighted in a recent report by Reuters.
Ford’s profit turmoil isn’t solely due to the tax credit debacle. An unexpected tariff change in late December squeezed the company further, doubling its related costs to €1.8 billion ($2 billion).
Despite the challenges, there’s a flicker of optimism on the horizon. Farley noted, “We anticipate a more stable policy environment for partnership with the administration this year, especially given a reset in the emission standards.” This shift refers to the Trump administration’s rollback of the stricter Corporate Average Fuel Economy (CAFE) standards, a move that drew ire from environmentalists but was welcomed by some within the auto and oil sectors.
Amid this turbulence, the question remains: how will Ford reimagine its strategy to compete against the fierce tide of Chinese innovation and pricing power?