Ford Motor Company reported an $8.2 billion net loss for 2025 on Tuesday, the automaker's worst financial performance since 2008 during the depths of the Great Recession. The fourth quarter alone brought an $11.1 billion loss, driven by what the company described as "unexpected tariff costs" and supply chain disruptions. CFO Sherry House told reporters the Trump administration's late changes to tariff relief provisions cost Ford an additional $900 million, bringing total 2025 tariff expenses to $2 billion.
That explanation dominated headlines. But the tariff bill, painful as it was, represents less than half of Ford's actual problem. The real damage came from the company's electric vehicle strategy, which collapsed spectacularly in December when Ford announced a $19.5 billion write-down on its EV investments and canceled multiple electric models including the F-150 Lightning, a truck executives once compared to the Model T in historical importance.
According to Crain's Detroit Business, Ford's Model e division, the unit responsible for electric vehicles and software, lost $4.8 billion in 2025. That's only slightly better than the $5.1 billion it lost in 2024. For 2026, Ford projects Model e will lose another $4 billion to $4.5 billion, meaning the division will hemorrhage roughly $14 billion across three years with no clear path to profitability.
The F-150 Lightning ended production in late 2025 after less than four years on the market. Launched in 2021 with promises of a $40,000 starting price, the truck never actually sold for anything close to that figure. The 2025 model started around $55,000, and even at that premium, Ford couldn't make money on it. Sales fell 10% year over year through November 2025, with only 25,583 units sold according to CBT News.
CEO Jim Farley told CNBC that "expensive electric trucks simply weren't generating the returns the company needed," admitting trucks priced between $50,000 and $70,000 weren't resonating with buyers. Ford accumulated $13 billion in EV losses since 2023 before finally pulling the plug. "Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting," Farley said in the interview.
The December announcement detailed the full scope of the retreat. Ford canceled the next-generation F-150 Lightning, originally designated the T3 truck and planned for production at the massive BlueOval City complex in Tennessee. That facility, once marketed as the future of Ford's electrification strategy, has been renamed the Tennessee Truck Plant and will now produce affordable gas-powered trucks instead. The Ohio Assembly Plant, also slated for EV production, will build gas and hybrid vans.
The $19.5 billion write-down breaks down into three components according to Fortune: $8.5 billion for canceled electric vehicle models, $6 billion for dissolving the battery joint venture with South Korea's SK On, and $5 billion in program-related expenses. Most of the charges hit in Q4 2025, with the remainder spreading through 2026 and 2027. The timing explains why Ford's Q4 net loss reached $11.1 billion despite only $2 billion in annual tariff costs.
Ford now faces battery manufacturing overcapacity after investing heavily in facilities designed to supply EV production lines that no longer exist. The company announced it will repurpose the Kentucky battery plant to manufacture batteries for stationary energy storage systems instead of vehicles, entering an entirely new business segment to utilize stranded assets. Lisa Drake, Ford vice president of technology platforms, told reporters "it just made a lot of sense as a natural adjacency" when asked about the pivot to grid-scale utility and data center customers.
The tariff issue, while real, pales in comparison. Yes, Ford paid $2 billion in tariff costs for 2025, double the original $1 billion projection. According to The Globe and Mail, the increase came from late December guidance clarifying that tariff relief on imported auto parts would take effect November 1 instead of May 1. House said the company expects similar $2 billion tariff costs in 2026, primarily related to aluminum sourcing for F-150 trucks.
That aluminum issue connects to the second major disruption Ford faced: fires at the Novelis aluminum plant in Oswego, New York, which supplies 40% of the aluminum sheet used by American automakers. The fires occurred in October and November 2025, shutting down the facility's hot mill and costing Ford another $2 billion in lost production during Q4. F-150 production at Dearborn dropped 42% month-over-month in November. Kansas City assembly fell 17%. F-150 Lightning production, already struggling, never resumed.
Detroit News reports the Novelis hot mill remains partially operational with full capacity not expected until sometime between May and September 2026. Ford has contingency plans to source aluminum globally through Novelis and other suppliers, but that increases tariff exposure since domestic capacity has little slack and import duties can reach 50%. The irony is stark: tariffs cost Ford $2 billion, but the aluminum shortage forcing them to import more aluminum will increase tariff costs even as domestic supply recovers.
Add it up. Tariffs: $2 billion. Aluminum fire: $2 billion. EV write-downs and losses: $24.3 billion ($19.5 billion in write-downs plus $4.8 billion in operating losses). One of these numbers is not like the others.
Ford's public messaging emphasized external factors. House told reporters on the earnings call that "despite notable external pressures, including significant tariffs, supply chain disruption from the Novelis fires and a dynamic global regulatory environment," Ford successfully managed through and improved execution. Farley's statement praised the company for delivering "a strong 2025 in a dynamic and often volatile environment" while making "difficult but critical strategic decisions."
Those difficult strategic decisions included abandoning the EV strategy Farley himself championed aggressively. In a July 2024 TV interview, he stated "the first thing we have to do is really put all of our capital toward smaller, more affordable EVs." Jerry Reynolds, a former Ford dealer and founder of CarPro, wrote an open letter warning Farley that "you cannot force a market that is not there" and questioning whether Ford should "put all Ford's cash toward smaller, more affordable EVs."
Reynolds wrote in a December blog post: "Twenty billion dollars is not an accounting entry; it is factories that could have been built, vehicles that could have been sold, and American jobs that could have been secured. The lesson here is not that electric vehicles are a mistake, because they are not. The lesson is that markets move at the pace of the customer, not the pace of press releases, boardrooms, or government mandates."
The broader EV market reinforced Ford's retreat. According to CBT News, U.S. EV sales fell 40% in November after Congress eliminated the $7,500 consumer tax credit. Every Ford EV model saw demand crater. The Mustang Mach-E, once a bright spot, struggled. The E-Transit van never gained commercial traction at scale. Only the F-150 Lightning generated significant attention, and Ford couldn't make money selling 25,000 units per year at $55,000 each.
Competitors faced similar challenges. GM took a $1.6 billion EV charge in October 2025. Stellantis announced its own EV write-down and canceled the electric Ram pickup, focusing instead on hybrids. Stellantis stock dropped 42% over the past year to roughly $7 per share. Ford's shares rose 47% to around $14, though they remain well below GM's $80, which gained 72% as GM consistently beat analyst expectations with stronger execution.
Ford's new strategy targets hybrids and extended-range electric vehicles rather than pure EVs. The next-generation F-150 Lightning, if it can still be called that, will feature a gasoline generator that recharges the battery pack, allowing the motors to operate for over 700 miles on a single tank. Farley claims this EREV configuration operates in all-electric mode 90% of the time while providing the range flexibility truck buyers demand. By 2030, Ford expects approximately 50% of global volume to be hybrids, EREVs, and fully electric vehicles, up from 17% in 2025.
The company also announced plans for an affordable EV lineup starting with a midsize truck priced around $30,000, scheduled for 2027 launch using a new Universal EV Platform. Whether Ford can actually build and sell an EV profitably at that price point remains unclear given its track record of missing cost targets. The Lightning was supposed to start at $40,000 and ended up at $55,000. Promises of affordable EVs ring hollow after billions in losses on expensive ones.
For 2026, Ford projects adjusted EBIT of $8 billion to $10 billion, up from $6.8 billion in 2025, with adjusted free cash flow between $5 billion and $6 billion. The guidance assumes flat tariff costs at $2 billion, offset by tariff relief provisions kicking in and aluminum supply normalization. Ford Pro, the commercial fleet business, is expected to deliver $6.5 billion to $7.5 billion. Ford Blue, the traditional gas vehicle unit, should contribute $4 billion to $4.5 billion. Model e will lose another $4 billion to $4.5 billion, with profitability still years away.
The company cut $1.5 billion in costs during 2025, exceeding its $1 billion target. Warranty costs fell roughly $500 million. Quality improved across plants and supply chains, with zero production losses during launches due to defects. These operational gains matter and demonstrate Ford can execute when focused on products it understands. But they're overwhelmed by the EV losses and write-downs.
Ford still leads the industry in vehicle recalls by a wide margin, though that's improved from previous years. The F-150 remains America's best-selling vehicle and Ford's most profitable product by far. Ford Pro posted $6.8 billion in earnings on 10.3% margins for 2025. Ford Blue made $3 billion on 3% margins. If Model e didn't exist, Ford would have reported solid profits despite tariffs and aluminum shortages.
Instead, Ford reported its worst loss since 2008, and the explanation offered to investors emphasized tariffs and supply chain disruptions rather than the strategic failure that cost five times as much. Tariffs are easy to blame. They're imposed externally, they're politically charged, and they affect all automakers. Admitting that Ford bet billions on electric trucks customers didn't want at prices Ford couldn't profit from is harder.
The numbers tell the story. Tariffs: $2 billion. Aluminum fire: $2 billion. Failed EV strategy: $24.3 billion. Ford lost more on electric vehicles in two years than it paid in tariffs over a decade. The Trump administration's late changes to tariff relief timing cost $900 million and pushed Ford below its guidance. The decision to pour capital into large EVs that would "never make money," in Farley's own words, cost $19.5 billion plus another $13 billion in operating losses since 2023.
Ford will recover. The F-150 prints money. Ford Pro dominates commercial fleets. Hybrids are selling. The pivot away from pure EVs removes a massive drag on earnings, though the write-downs hit hard in the short term. By 2027, assuming the aluminum supply normalizes and tariff costs stabilize, Ford should return to consistent profitability if it sticks to what it does well: trucks, vans, and commercial vehicles.
But the lesson is expensive and the explanation dishonest. Ford crashed to its worst loss since the Great Recession because it bet the company on electric vehicles customers didn't want and couldn't build profitably, not because Trump imposed tariffs. The tariffs hurt. The aluminum fire hurt. The EV strategy nearly broke the company. Blaming external factors for losses driven by internal decisions is convenient politics. It's also bad management.