Ford expects to rack up EV losses of up to $5.5B in 2025, sending shares skidding

Core Insights - Ford Motor projected losses of up to $5.5 billion in its electric vehicle and software operations for the year, indicating ongoing challenges in reducing costs for battery-powered models [1] - The company reported a net profit of $1.8 billion for the fourth quarter, a significant improvement from a loss of $500 million in the same quarter last year [1] - Ford's CEO, Jim Farley, expressed concerns about potential tariffs on goods from Mexico and Canada, which could significantly impact industry profits and US jobs [3][5] Financial Performance - Ford's fourth-quarter revenue reached $48.2 billion, exceeding analyst expectations of $43 billion, with adjusted earnings per share of 39 cents, surpassing forecasts of 33 cents [6] - The company met its annual guidance for 2024, recording annual EBIT of $10.2 billion, but projected lower earnings before interest and taxes of $7.0 billion to $8.5 billion for 2025 [12] Electric Vehicle Strategy - Significant cuts were made to Ford's EV plans, including the cancellation of a three-row electric SUV and delays in launching the next-generation electric F-150 Lightning truck [7][10] - Ford sold approximately double the number of hybrids compared to EVs last year, with 187,426 hybrids sold versus 97,865 EVs [9] - The company is focusing on a multi-powertrain approach to mitigate potential impacts from the elimination of the federal EV tax credit [11] Tariff Concerns - The company did not factor potential tariffs into its annual outlook, despite the recent executive order imposing 25% tariffs on goods from Mexico and Canada [13] - Tariffs could affect popular models like the Maverick pickup truck and the Mustang Mach-E SUV, which are assembled in Mexico [14] - Analysts noted that Ford is the least exposed to tariffs among the Big Three Detroit automakers, as GM and Stellantis produce more profit-rich vehicles outside the US [14]