How Quickly Can Ford Reverse This $16 Billion Problem?

Core Viewpoint - Investors are questioning when electric vehicle (EV) losses for Ford and General Motors will reverse, with Ford's significant losses since 2022 being a focal point [1][2]. Group 1: Financial Performance - Ford has incurred over $16 billion in losses on its EV business since 2022, with a reported loss of $4.8 billion in its Model-e division for the last quarter, showing a slight improvement from the previous year's loss of over $5 billion [2][3]. - The company anticipates further losses in its EV division, expecting to lose between $4 billion and $4.5 billion in 2026 [3]. - Ford's market capitalization stands at $56 billion, with a current stock price of $13.87 and a dividend yield of 5.31% [8]. Group 2: Strategic Outlook - Ford's next significant push in EVs is not expected until 2027, when a new production approach and Universal EV Platform will facilitate the launch of a midsize electric truck priced around $30,000 [7]. - The company does not expect to break even on its EV division until around 2029, as stated by the CFO during a conference call [7]. - The substantial losses in the EV sector highlight the importance of reversing these losses to allocate capital more effectively, potentially for high-return projects or shareholder returns [9]. Group 3: Competitive Landscape - Ford's early investment in EV strategies has been costly, with a $19.5 billion special charge taken to pivot its EV strategy, while General Motors has opted for share buybacks to enhance shareholder value [5][9]. - GM has initiated $10 billion in buybacks in 2023, with additional authorizations of $6 billion for 2024 and 2025, contrasting Ford's approach of returning value primarily through dividends [5].