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Is Ford's Model e Business Dragging Down its Overall Results?
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Key Takeaways
Model e faces pressure from stiff competition and the need for constant innovation in EVs.
Ford's EV strategy includes improving charging access via the Ford Power Promise campaign.
Plans are underway to boost Model e volumes with recent product launches in upcoming quarters.
US Legacy automaker Ford Motor Company (F - Free Report) operates a dedicated electric vehicle (EV) segment, Model e, to focus and strategize its efforts toward EVs. The company’s Mustang Mach-E and F-150 Lightning EVs have been received well by customers. The segment, however, has failed to generate profits for the company despite continued improvements.
After having incurred losses of $4.7 billion in its EV business in 2023, Ford’s loss from Model e widened to $5.07 billion in 2024, exacerbated by ongoing pricing pressure and increased investments in next-generation EVs. The segment incurred losses of $849 million in the first quarter of 2025, owing to stiff competition, pricing pressure and significant costs associated with new-generation EV development. The company is expected to incur huge losses in its EV business this year as well.
The persisting pricing pressures caused by stiff competition in the industry are significantly ailing margins. China’s markets, led by BYD, have been slashing prices, forcing others to follow. The industry also remains prone to supply-chain disruptions. To keep up with the contemporary developments in the industry, Ford has to consistently invest ample amounts.
Although the investments are weighing down cash flows, these remain indispensable. Ford is working to improve charging infrastructure throughthe Ford Power Promise campaign, the success of which has already provided customers with a home charger in standard installation. Further plans to drive volumes in the upcoming quarters with recent launches are in place.
Peer Comparison
Toyota Motor Corporation (TM - Free Report) , a Japanese auto giant, also remains cautious in its approach toward fully electric vehicles. Toyota’s EVs did not constitute more than 1% of its sales globally in fiscal 2025. This has led Toyota to plan on cutting down its EV production target by 20%, reducing from 1.5 million to 1 million units by 2026. However, the company has started to unveil several new EVs. In China, Toyota launched its most affordable EV, the bZ3X, in March, starting at just over $15,000, to regain the market.
Honda (HMC - Free Report) , TM’s closest peer, is also cutting down its EV production as global demand remains stunted. Honda rather seems to shift its focus toward hybrid cars, aiming to launch 13 new hybrid models globally between 2027 and 2030. With rising pressure in China and loosened emission targets in the United States, Honda is expecting a rise in hybrids’ popularity, leading to a 30% lowered investment target in EVs.
The Zacks Rundown for Ford
Shares of Ford have lost around 10% year to date against the industry’s growth of 11%.
Image Source: Zacks Investment Research
From a valuation standpoint, F trades at a forward price-to-sales ratio of 0.25, below the industry average. It carries a Value Score of A.
Image Source: Zacks Investment Research
Take a look at how Ford’s EPS estimates have been revised over the past 30 days.
Image: Bigstock
Is Ford's Model e Business Dragging Down its Overall Results?
Key Takeaways
US Legacy automaker Ford Motor Company (F - Free Report) operates a dedicated electric vehicle (EV) segment, Model e, to focus and strategize its efforts toward EVs. The company’s Mustang Mach-E and F-150 Lightning EVs have been received well by customers. The segment, however, has failed to generate profits for the company despite continued improvements.
After having incurred losses of $4.7 billion in its EV business in 2023, Ford’s loss from Model e widened to $5.07 billion in 2024, exacerbated by ongoing pricing pressure and increased investments in next-generation EVs. The segment incurred losses of $849 million in the first quarter of 2025, owing to stiff competition, pricing pressure and significant costs associated with new-generation EV development. The company is expected to incur huge losses in its EV business this year as well.
The persisting pricing pressures caused by stiff competition in the industry are significantly ailing margins. China’s markets, led by BYD, have been slashing prices, forcing others to follow. The industry also remains prone to supply-chain disruptions. To keep up with the contemporary developments in the industry, Ford has to consistently invest ample amounts.
Although the investments are weighing down cash flows, these remain indispensable. Ford is working to improve charging infrastructure throughthe Ford Power Promise campaign, the success of which has already provided customers with a home charger in standard installation. Further plans to drive volumes in the upcoming quarters with recent launches are in place.
Peer Comparison
Toyota Motor Corporation (TM - Free Report) , a Japanese auto giant, also remains cautious in its approach toward fully electric vehicles. Toyota’s EVs did not constitute more than 1% of its sales globally in fiscal 2025. This has led Toyota to plan on cutting down its EV production target by 20%, reducing from 1.5 million to 1 million units by 2026. However, the company has started to unveil several new EVs. In China, Toyota launched its most affordable EV, the bZ3X, in March, starting at just over $15,000, to regain the market.
Honda (HMC - Free Report) , TM’s closest peer, is also cutting down its EV production as global demand remains stunted. Honda rather seems to shift its focus toward hybrid cars, aiming to launch 13 new hybrid models globally between 2027 and 2030. With rising pressure in China and loosened emission targets in the United States, Honda is expecting a rise in hybrids’ popularity, leading to a 30% lowered investment target in EVs.
The Zacks Rundown for Ford
Shares of Ford have lost around 10% year to date against the industry’s growth of 11%.
Image Source: Zacks Investment Research
From a valuation standpoint, F trades at a forward price-to-sales ratio of 0.25, below the industry average. It carries a Value Score of A.
Image Source: Zacks Investment Research
Take a look at how Ford’s EPS estimates have been revised over the past 30 days.
Image Source: Zacks Investment Research
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.