Ford EV business lost nearly $5 billion in 2025, forcing the automaker to completely rethink its electric vehicle strategy. CEO Jim Farley acknowledged the failure during Tuesday's earnings call, stating "the customer has spoken" after the company reported $4.8 billion in annual losses for its EV division.

Ford EV Sales Decline 14% Amid Market Challenges

Ford's electric vehicle sales fell 14% from the previous year, with the Mustang Mach-E, F-150 Lightning, and E-Transit all underperforming expectations. The company sold just 27,307 F-150 Lightnings in 2025, down 18.5% from 2024, despite initially receiving nearly 200,000 reservations and projecting annual sales of 150,000 units.

The timing could not have been worse for Ford's EV ambitions. After the $7,500 federal tax credit ended in September 2025, F-150 Lightning sales plummeted from 5,197 units in December 2024 to just 1,724 a year later. Industry analysts note that the end of subsidies exposed the true market demand for Ford's premium-priced electric trucks.

Ford Betting on Hybrid Vehicles Instead

While pure electric vehicle sales struggled, Ford's hybrid F-150s experienced significant growth. The company sold 84,934 hybrid F-150s last year, a 15% increase that validated the company's decision to pivot toward hybrid technology. Ford has since ended production of its all-electric F-150 Lightning and plans to reintroduce it as an extended-range electric vehicle with a gas generator onboard.

"We're betting on hybrid across our lineup, and EREV where it makes sense," Farley said during the call. "Like a large truck, where towing is a really important application, and both PHEV and pure electric will definitely not work." This shift represents a major reversal from Ford's earlier strategy of electrifying its most iconic vehicles first.

New Strategy Focuses on Affordable EVs

Ford is now developing a new "universal" EV platform designed for lower-cost, high-volume vehicles. The first model, a roughly $30,000 midsize pickup, is expected in 2027. Ford plans to build at least five vehicles off this platform, potentially including SUVs and commercial vans.

The strategy follows a broader industry trend. Other major automakers including Toyota, Subaru, Rivian, Nissan, and Chevrolet are planning launches for sub-$50,000 EVs this year. Business analysts suggest that the era of premium-priced electric vehicles is ending as manufacturers target mainstream consumers.

Ford Expects Continued EV Losses Through 2029

Despite the strategic pivot, Ford expects its EV business to remain in the red for several more years. CFO Sherry House said the company is targeting break-even for the segment around 2029. Ford expects to lose another $4 billion to $5 billion this year as it transitions to the new platform.

"We aren't just building compliance vehicles at Ford. We're launching a cost-efficient, universal EV platform that will drive profitable growth," Farley added. "Tesla's shown that they could, we can make money in that market, even without subsidy from the government at the right cost level." However, investors remain cautious after Ford missed earnings estimates for the quarter, reporting 13 cents adjusted earnings per share versus analysts' estimates of 19 cents.

The Ford EV business lost $5 billion in 2025, making it one of the most expensive failed bets in automotive history. Check Ford's official sales numbers.