Alberto de la Torre
WriterI've been a journalist and audiovisual communicator since 2016. My specialty is the automotive sector, where I’ve been analyzing the industry and its developments for more than five years. I'm particularly interested in new forms of mobility and the changes that cities are experiencing, especially in urban planning and the promotion of cycling and personal mobility vehicles.
In 2017, Ford announced a $4.5 billion investment to transform the brand completely. Then-CEO Mark Fields confirmed plans to invest in electric vehicles and fully autonomous driving technology. The goal was to launch 13 new electrified models over the following five years, with a fully autonomous car expected to hit the market by 2021.
Just months later, Tesla’s share price surpassed Ford’s, driven by the expected launch of the Tesla Model 3. This shift highlighted the pressure Tesla was placing on Ford, which had over a century of history and was known for producing the first major mass-produced car in the U.S. This competition pushed Ford to invest heavily in a relatively new technology.
Moving forward to 2025, Ford has introduced several electric models, including the Ford Mustang Mach-E, the Ford F-150 Lightning (an electric pickup), the Ford Explorer, and the Ford Capri. The manufacturer has also launched the electric Ford Puma, albeit with less fanfare.
To refine its strategy, Ford decided to split the company into two divisions: Ford Model e (focusing on electric vehicles and software) and Ford Blue (covering traditional combustion engines). The intention is to create a balance between the two divisions, gradually shifting focus and resources from Ford Blue towards Ford Model e. This goes in line with the transition from combustion to electric vehicles.
However, this strategy is currently facing challenges. Ford CEO Jim Farley has a strong stance on the reasons behind the company’s current status.
Burning Through $2 Billion
Ford’s strategy is failing. In its latest earnings presentation, Farley confirmed that the company is forecasting a $2 billion decline in expected profits.
According to Bloomberg, Ford doesn’t expect profits (before taxes) to exceed $8.5 billion in 2025. In fact, they could potentially fall below $8 billion, a significant decrease from the $10.2 billion generated in this category in 2024. Since summer, the company’s shares have experienced a steep decline, losing more than 35% of their value due to increasingly poor expectations reflected in each new report.
Given the sales volumes with which electric car companies operate, Ford must confront a market where profit margins are either very slim or have completely disappeared. Additionally, Farley points out that the types of cars preferred by American consumers are often the opposite of what’s typically expected from electric vehicles.
“These customers have very demanding use cases for an electric vehicle. They tow, they go off-road, they take long road trips. These vehicles have worse aerodynamics and they’re very heavy, which means very large and expensive batteries,” Farley says. This isn’t the first time the Ford CEO claims that larger vehicles present a significant issue for electric technology.
In fact, this issue has already cost the company $2 billion. Amid the growing trend for large electric vehicles, Ford initiated the development of a seven-seater electric Ford Explorer to compete with big American SUVs. However, in the summer of 2024, Ford announced the cancellation of the project, citing a lack of demand.
Since then, Farely has been claiming that large vehicles require massive batteries that are expensive to produce and difficult to make profitable. As a result, Ford’s strategy has shifted toward selling smaller electric cars where the seven-seater electric Ford Explorer has no place. Ironically, the company had initially decided to focus on larger models, such as the Ford Mustang Mach-E and the Ford F-150 Lightning.
One alternative approach is to learn directly from China, which has positioned itself as the leading nation in battery technology. Farley has recognized China’s innovative practices and reported that Ford is taking apart Chinese cars to understand how the Asian country has gained its competitive edge.
Farley told The New York Times that China is 10 years ahead in battery manufacturing, which gives the country a strategically advantageous position. This head start means Chinese manufacturers are less burdened by the economic challenges that U.S. companies, like Ford, currently face.
Additionally, U.S. automakers are confronting the possibility of a trade war that could drive up the prices of their products. For instance, the Ford Mustang Mach-E is manufactured in Mexico, and the tariffs on steel and aluminum will likely contribute to higher final costs. Regulatory changes that Ford didn’t account for in the last earnings report further complicate matters.
Ford’s future relies on BlueOval City, a massive factory costing $5.6 billion that was conceived in 2021 and developed under the framework of former President Joe Biden’s Inflation Reduction Act. However, with President Donald Trump’s return to office, the viability of this program is uncertain. Through this initiative, Ford hopes to produce batteries at a lower cost in the coming years.
However, Farley is adamant. China has a 10-year lead over the U.S., and no American company can currently compete with CATL’s batteries in terms of performance and charging time.
Image | Jessy Smith
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