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Ford's EV Retrenchment Deepens: Buy F Stock or Stay Away?
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U.S. auto biggie Ford (F - Free Report) is scaling back its electric vehicle (EV) ambitions once again—this time by opening the doors of its battery plant to a rival. In a move that highlights the growing pressure facing automakers, Ford will allow Japan’s Nissan (NSANY - Free Report) to use part of its underutilized Kentucky battery facility. This factory was originally part of Ford’s $7 billion EV investment push in 2021, built in partnership with South Korea’s SK On. Today, one plant sits idle, and only a portion of the other is producing batteries. Now that part will make batteries for both Nissan and Ford.
Partnering with Nissan will help absorb excess capacity.Nissan incurred a $4.5 billion loss in the last reported quarter and just scrapped plans for a battery plant in Japan. Local U.S. production will help reduce its tariff exposure, which is a strategic move by Nissan.
Nissan’s peer Honda (HMC - Free Report) is also rethinking its EV roadmap. As global demand cools, Honda is slashing its EV and software investment target by nearly a third and pivoting toward hybrids. Honda now plans to launch 13 new hybrid models globally by 2030, while scaling back expectations for fully electric vehicles.
These moves underscore the challenges Ford and other automakers are facing as EV demand stalls and costs climb. Ford has suspended its full-year 2025 guidance, citing tariff-related uncertainties. The company incurred a $5.07 billion EV loss in 2024, and we expect another $5 billion at least in red ink this year.
At this stage, investors may be wondering if the automaker still has a compelling long-term case. Let’s dig into the investment thesis.
Headwinds Ford Can't Ignore
Ford is navigating through some tough terrain. One of the biggest hurdles is the impact of Trump tariffs, which are expected to cost the company a staggering $2.5 billion. While Ford plans to cushion the blow by offsetting $1 billion through various efficiency and cost-cutting measures, the remaining $1.5 billion hit in 2025 looms large. With potential retaliatory tariffs and ongoing supply chain disruptions, the road ahead remains unpredictable. On a broader scale, tariffs could slash U.S. auto industry sales by around 500,000 units, a drop that would undoubtedly weigh on Ford’s own sales and bottom line.
The traditional Ford Blue division, which sells gas-powered vehicles, is also showing signs of fatigue. The company anticipates lower sales of internal combustion engine (ICE) vehicles this year compared to 2024 A shift in product mix, combined with foreign exchange headwinds, is expected to further compress profits.
At the same time, Ford’s ambitious investments in green mobility and autonomous driving technology — while vital for the future — are taking a toll on its short-term financial flexibility. The company is pouring billions into modernization efforts, including digital infrastructure, IT systems and product rollouts. As a result, cash flow pressure remains a near-term concern for investors.
Silver Linings in Ford’s Playbook
Still, not everything is working against Ford. A standout bright spot is its Ford Pro division, which serves commercial and fleet customers. The segment is showing robust demand, backed by strong demand for its Super Duty truck. The integrated offering across vehicles, software, and physical services is gaining traction and could be a major growth engine in the years ahead. Ford’s sharpened focus on software and service-led revenues underpins a powerful long-term shift in its business model.
Then there’s Ford’s strong liquidity cushion. The company exited the first quarter of 2025 with $27 billion in cash and about $45 billion in total liquidity. The company is on track to deliver $1 billion in cost savings this year, excluding the impact of tariffs.
Finally, Ford’s dividend yield of over 5% offers a compelling case for income-focused investors, especially when compared to the S&P 500’s average yield of just over 1%. With a plan to return 40-50% of free cash flow to shareholders, Ford is reinforcing its commitment to delivering consistent returns, even as it reshapes its business for the future.
Price Performance, Valuation and Estimates for F
Shares of Ford have declined around 11% over the past year against the industry’s gain of 29%.
Image Source: Zacks Investment Research
From a valuation standpoint, Ford trades at a forward price-to-sales ratio of 0.27, below the industry as well as its own 5-year average. F carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for F’s 2025 earnings implies a 38% drop year over year. Here’s how the EPS estimates for 2025 and 2026 have been revised over the past 60 days.
Estimate Trend for Ford
Image Source: Zacks Investment Research
Conclusion
Ford’s latest move to share its battery plant with Nissan underscores the shifting ground beneath the EV market. While near-term headwinds—from tariffs to weakening ICE sales to heavy investment outlays—pose real challenges, Ford’s strengths should not be overlooked. Its Ford Pro segment, solid liquidity and generous dividend support the case for long-term stability. Still, the road to transformation is costly and uncertain. With mixed signals across its business, Ford remains a wait-and-watch story for now.
Existing investors may want to hold their positions, while potential buyers should wait for clearer signs of progress in margins, EV strategy and cost control.
Image: Bigstock
Ford's EV Retrenchment Deepens: Buy F Stock or Stay Away?
U.S. auto biggie Ford (F - Free Report) is scaling back its electric vehicle (EV) ambitions once again—this time by opening the doors of its battery plant to a rival. In a move that highlights the growing pressure facing automakers, Ford will allow Japan’s Nissan (NSANY - Free Report) to use part of its underutilized Kentucky battery facility. This factory was originally part of Ford’s $7 billion EV investment push in 2021, built in partnership with South Korea’s SK On. Today, one plant sits idle, and only a portion of the other is producing batteries. Now that part will make batteries for both Nissan and Ford.
Partnering with Nissan will help absorb excess capacity.Nissan incurred a $4.5 billion loss in the last reported quarter and just scrapped plans for a battery plant in Japan. Local U.S. production will help reduce its tariff exposure, which is a strategic move by Nissan.
Nissan’s peer Honda (HMC - Free Report) is also rethinking its EV roadmap. As global demand cools, Honda is slashing its EV and software investment target by nearly a third and pivoting toward hybrids. Honda now plans to launch 13 new hybrid models globally by 2030, while scaling back expectations for fully electric vehicles.
These moves underscore the challenges Ford and other automakers are facing as EV demand stalls and costs climb. Ford has suspended its full-year 2025 guidance, citing tariff-related uncertainties. The company incurred a $5.07 billion EV loss in 2024, and we expect another $5 billion at least in red ink this year.
At this stage, investors may be wondering if the automaker still has a compelling long-term case. Let’s dig into the investment thesis.
Headwinds Ford Can't Ignore
Ford is navigating through some tough terrain. One of the biggest hurdles is the impact of Trump tariffs, which are expected to cost the company a staggering $2.5 billion. While Ford plans to cushion the blow by offsetting $1 billion through various efficiency and cost-cutting measures, the remaining $1.5 billion hit in 2025 looms large. With potential retaliatory tariffs and ongoing supply chain disruptions, the road ahead remains unpredictable. On a broader scale, tariffs could slash U.S. auto industry sales by around 500,000 units, a drop that would undoubtedly weigh on Ford’s own sales and bottom line.
The traditional Ford Blue division, which sells gas-powered vehicles, is also showing signs of fatigue. The company anticipates lower sales of internal combustion engine (ICE) vehicles this year compared to 2024 A shift in product mix, combined with foreign exchange headwinds, is expected to further compress profits.
At the same time, Ford’s ambitious investments in green mobility and autonomous driving technology — while vital for the future — are taking a toll on its short-term financial flexibility. The company is pouring billions into modernization efforts, including digital infrastructure, IT systems and product rollouts. As a result, cash flow pressure remains a near-term concern for investors.
Silver Linings in Ford’s Playbook
Still, not everything is working against Ford. A standout bright spot is its Ford Pro division, which serves commercial and fleet customers. The segment is showing robust demand, backed by strong demand for its Super Duty truck. The integrated offering across vehicles, software, and physical services is gaining traction and could be a major growth engine in the years ahead. Ford’s sharpened focus on software and service-led revenues underpins a powerful long-term shift in its business model.
Then there’s Ford’s strong liquidity cushion. The company exited the first quarter of 2025 with $27 billion in cash and about $45 billion in total liquidity. The company is on track to deliver $1 billion in cost savings this year, excluding the impact of tariffs.
Finally, Ford’s dividend yield of over 5% offers a compelling case for income-focused investors, especially when compared to the S&P 500’s average yield of just over 1%. With a plan to return 40-50% of free cash flow to shareholders, Ford is reinforcing its commitment to delivering consistent returns, even as it reshapes its business for the future.
Price Performance, Valuation and Estimates for F
Shares of Ford have declined around 11% over the past year against the industry’s gain of 29%.
From a valuation standpoint, Ford trades at a forward price-to-sales ratio of 0.27, below the industry as well as its own 5-year average. F carries a Value Score of A.
The Zacks Consensus Estimate for F’s 2025 earnings implies a 38% drop year over year. Here’s how the EPS estimates for 2025 and 2026 have been revised over the past 60 days.
Estimate Trend for Ford
Conclusion
Ford’s latest move to share its battery plant with Nissan underscores the shifting ground beneath the EV market. While near-term headwinds—from tariffs to weakening ICE sales to heavy investment outlays—pose real challenges, Ford’s strengths should not be overlooked. Its Ford Pro segment, solid liquidity and generous dividend support the case for long-term stability. Still, the road to transformation is costly and uncertain. With mixed signals across its business, Ford remains a wait-and-watch story for now.
Existing investors may want to hold their positions, while potential buyers should wait for clearer signs of progress in margins, EV strategy and cost control.
Ford stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.