Ford presented its business figures for the first quarter and reported a 200% increase in sales for its electric car division. As a result, turnover is also higher, and the loss is lower than a year ago. However, the loss still totals $850 million, and the manufacturer seems to be struggling with its EV future.
The good news is that Ford’s electric car division is regaining some solid ground. Compared to the opening quarter of 2024, the Model e division now generated $1.2 billion (+967 %) instead of $0.1 billion and ‘only’ made an EBIT loss of $849 million instead of $1.3 billion.
Sales were a significant driver in this positive evolution, but not the only one. They rose by 213% from around 10,000 to 31,000 units. Another factor is likely to have been cost savings.
With a little help from Europe
The company states that the volume has risen, “driven by European product launches.” In other words, the recently manufactured Capri and Explorer electric cars in Cologne helped increase sales.
The cost of materials also fell, while the net price of the vehicles increased. Ford’s credo for the current year is: “Ford Model e reported a first-quarter EBIT loss of $849 million. The segment remains focused on improving gross margins and exercising a disciplined approach to investments in battery facilities and next-generation products.”
Sales for the company as a whole fell slightly in the first quarter to $40.7 billion (-5 % year over year), with the Blue combustion engine division contributing $21 billion, the Ford Pro van division $15.2 billion, and Model e $1.2 billion.
Ford reported an adjusted EBIT result of $1 billion (-63%). And for the current year, U.S. tariff policy could make successful business even more difficult in Ford’s eyes: the top management estimates “a tariff-related net adverse adjusted EBIT impact of about $1.5 billion for full year 2025, subject to ongoing tariff-related policy developments.”
Model e: Which course to go?
The figures for Model e are encouraging compared to the same period a year earlier. However, they must also be viewed in the context of the situation at the beginning of 2024: Ford reported particularly meagre figures in Q1/2024. Sales fell by 84%, which Ford attributed to ‘industry-wide price pressure’.
At the time, the car manufacturer had to use prices to work off full stocks. Losses of $5.1 billion accumulated over the full year 2024. This was even more than in 2023, to which Ford responded with a change of personnel at the head of Model e, among other things.
In its annual review of 2024, Ford stated that it did not expect a turnaround for 2025 either: according to the yearly forecast presented at the time, the division was expected to make a loss of $5 to $5.5 billion this year. In this respect, the first quarter has been better than expected.
Just yesterday, we also received information that Ford will likely have discontinued its programme to develop its next-generation electronics architecture.
According to Reuters, citing insider sources, Ford is stepping back from its previously ambitious programme to create an advanced E/E architecture under the working title FNV4 (‘fully-networked vehicle’) for Ford’s future software-defined vehicles. Company executives had consistently described the system as “pivotal to competing with electric-vehicle pioneers such as Tesla.”
The reported reasons for the reversal are “ballooning costs and delays.” The FNV4 project is said to have contributed significantly to Ford’s losses in the electric vehicle and software segments.
Reuters reports that the project had been a strategic priority for Ford CEO Jim Farley and his deputy Doug Field, a former Apple and Tesla executive who joined the company in 2021. Following the apparent U-turn, the learnings from FNV4 are now expected to be incorporated into Ford’s current software platform, which is being developed by a so-called Skunkworks team within the company’s California operations.
A common weakness of current automotive software systems is their fragmented nature, as they often integrate code from dozens of suppliers. This complexity makes them difficult to maintain and update. The report does not address whether Ford is now exploring a partnership, similar to Volkswagen’s collaboration with Rivian. Volkswagen Group has also been struggling for years with its future software, and creating a special subsidiary for it, Cariad, has been a bumpy road.
Farley reiterated to Reuters as recently as September that the company remained firmly committed to building software-defined vehicles, including electric cars, combustion engine cars, and hybrid models.
And Trump?
Ford is among the least exposed automakers to President Trump’s 25% tariff on imported vehicles. There are a few exceptions to that issue, though. For example, the Maverick and Bronco Sport compact trucks and SUVs are built in Mexico. However, Ford has a potentially bigger problem on its hands: The Mustang Mach-E, its most crucial electric vehicle in the States at the moment, is also built in Mexico.
That means it’ll get hit with a 25% tariff. But that doesn’t mean Ford will walk away from the Mach-E. It’s not even cutting production. Asked about whether the company will trim Mach-E output due to tariff issues, Andrew Frick, president of Ford’s Blue and Model e divisions, was clear.
“It’s business as usual. We do not plan on making any adjustments or lowering the production,” he said during Monday’s first-quarter earnings call. “The vehicle is doing very well right now. We actually have a very low day supply of the vehicle itself,” he added, referring to how many days’ worth of inventory dealers have. Frick also pointed out that there’s unfilled demand in Europe, so the company can deal with some excess supply by increasing exports across the Atlantic.
Meet the regulation targets
But that’s not the main reason Ford isn’t slowing down. In the States, automakers are required to meet both Corporate Average Fuel Economy (CAFE) targets and Zero-Emission Vehicle (ZEV) quotas to satisfy federal and state regulations.
These targets are, of course, linked to how many ICE and EV vehicles you sell. So if you’re an automaker that sells a bunch of big, thirsty SUVs and trucks, you need to sell a lot of EVs to offset their emissions. The Mach-E is Ford’s way of ensuring it sits closer to its emissions targets and doesn’t have to buy too many credits from other, ‘greener’ competitors.
That means Ford can’t just pull the plug unless it can replace those EV sales with something built in the U.S. The brand’s other EV, the F-150 Lightning, is built in the U.S., but its sales volumes are a fraction of the Mach-E’s. In the long term, Ford wants to develop its high-volume EV models in the U.S. In the short term, importing the Mach-E remains Ford’s best option. “It’s essential to our overall compliance,” Frick concluded.
