Ford continues to lose a lot of money on electric vehicles like the F-150 Lightning and Mustang Mach-E. The new tariffs on Mexico and China – which may or may not go into effect – as well as former President Biden’s removal of EV incentives are unlikely to help. On the positive side, Ford still has money from its gas-powered vehicles, so the company remains profitable overall and can use that money to continue its electrification course, to which it fortunately remains committed.
For the whole of 2024, Ford earned a net profit of $5.9 billion with an adjusted profit of $10.2 billion. However, its electric vehicle business lost $5.1 billion, which is even worse than $4.7 billion a year earlier. In 2025, the company is expected to lose even more – $5.5 billion on electric vehicles.
Switching to an entirely new type of vehicle platform requires significant upfront research and development, supply chain, and marketing costs. Automakers must reckon with basic economies of scale. Ford has to sell a lot of electric cars to recoup its investment and start making money on each car, but the cars have to be affordable so that people can buy them. In the United States, the only electric car manufacturer that has actually started to make a profit on each car is Tesla, and this company started by selling luxury cars to wealthy tech executives, even while living on the brink of bankruptcy for many years. Losses are virtually guaranteed for years to come.
In the past, there has been concern that automakers such as Ford and General Motors only pay lip service to electrification. For example, during President Trump’s first administration, GM supported his plan to roll back California’s increased emissions standards. The business of gasoline-powered cars has been very profitable for a long time, so the old automakers had no incentive to switch to electric vehicles. This is the problem of the innovator’s dilemma. Say what you will about Tesla CEO Elon Musk, he has helped make this transition happen.
However, in 2025, GM is in a very different position, with a wide range of electric vehicles on the market that have already received good reviews, such as the Silverado EV. The automaker’s CEO, Mary Barra, said that the electric vehicle business will become profitable this year. It seems that despite the slowdown, electric cars have reached a tipping point where their decline is inevitable. Most people who have driven an electric car admit that it is much more fun and enjoyable, but companies like Rivian have not been able to bring down the stubbornly high prices. This company promises that its R2 will be more affordable with a starting price of about $45,000-still too high for most, but better than its existing lineup.
Just as gas-powered cars have been supported by decades of investment, including President Eisenhower’s investment in the interstate highway network, it will take time to build out the electric vehicle infrastructure. Charging remains a challenge, but continues to improve.
Ford recently abandoned its most ambitious EV commitments as investors demanded that the company improve its financial performance and EV sales growth slowed. The company has abandoned a three-row electric SUV, and its F-150 Lightning has become a bit obsolete. Last month, sales of the pickup truck fell 15.5% to 1,907 vehicles, down from 2,258 in January 2024. The Mustang Mach-E is still selling well, but according to Electrek, Ford sold 2,539 of these vehicles in January, up 172% from the same month last year when 1,295 units were sold. The automaker hopes that the new platform it is developing will allow it to produce electric vehicles that will be more affordable for the average buyer. Ford is also producing more hybrid electric vehicles and electric vehicles with small gas generators that can recharge the battery and increase their range, offering up to 700 miles on a single charge. That’s what Volkswagen’s Scout subsidiary is doing in the U.S. after previously promising to produce all-electric pickups.
Musk has supported President Trump’s plans to end the electric vehicle incentives. Critics believe this is partly due to the fact that Tesla is already profitable on a per-car basis, so it doesn’t need tax breaks as much as traditional automakers. He has long said that he is interested in doing whatever is best for the electrification movement as a whole, even if it hurts his own company, but few people believe that. Recent sales data from California and Germany suggest that his policies are hurting Tesla’s sales, setting back the transition to electric vehicles. Musk’s support for President Trump has made him extremely unpopular in California, the largest American market for electric vehicles, and in Germany he recently endorsed the far-right Alternative for Germany (AfD) party, which rejects the country’s Nazi past.
All of this is sad because Chinese EV makers are circling the wagons around the United States, entering Europe and markets like Brazil and Mexico with affordable and premium electric vehicles that threaten the dominance of American automakers. China is investing in the EV sector in an effort to make its country more influential in the world, and it seems to be working. Meanwhile, President Trump and Elon Musk are now more focused on generative artificial intelligence, so Americans may have to accept a slower transition to electric vehicles over the next few years and a potentially diminished influence of the American automotive industry.
