Ford CEO Jim Farley knew the EV pain would be bad, but the ‘punch line’ is a $4.8 billion loss: ‘The customer has spoken’

Core Viewpoint - Ford Motor CEO Jim Farley predicts a significant decline in the electric vehicle (EV) market due to the expiration of federal tax credits, estimating that EV sales will drop to 5% of the industry from the current 10% to 12% [1][2] Group 1: Financial Performance - Ford's Model E electric vehicle unit reported a $4.8 billion operating loss, with expectations of an additional loss of $4 billion to $4.5 billion in 2026 [1] - The break-even target for the Model E unit has been pushed back to 2029 [1] - Ford anticipates approximately $7 billion in special charges over 2026 and 2027 related to the transition from its old EV strategy [5] Group 2: Market Strategy - The company is shifting focus to a "high-volume, affordable end of the market," specifically targeting the $30,000 to $35,000 price range for EVs [4] - This new strategy contrasts with the previous focus on higher-priced electric trucks and SUVs, which were deemed too expensive by consumers [4] - Farley emphasized that Ford will no longer build EVs solely to meet regulatory targets, indicating a shift in production philosophy [3] Group 3: Market Response - Despite the grim forecasts, Ford's stock has increased by more than 27% over the past six months, suggesting that the market had been prepared for these developments [2] - Farley noted that the consumer's preferences have influenced the company's strategic pivot, reflecting a deeper understanding of the "duty cycle" of vehicle usage [3]