Core Insights - Ford ended 2025 with a significant net loss of $11.1 billion on a GAAP basis, a stark contrast to a profit of $1.8 billion in Q4 2024, marking the end of a four-quarter earnings beat streak [1] - The disappointing performance was attributed to one-off disruptions, policy-related costs, and special charges related to the company's EV strategy reset [2][5] Financial Performance - Ford's Q4 2025 results included a non-GAAP EPS of 13 cents, missing the Zacks Consensus Estimate of 17 cents and reflecting a 26% decline year over year [1] - The company incurred approximately $2 billion in losses due to supplier disruptions and an additional $2 billion in net tariff headwinds, alongside $15.5 billion in special charges primarily linked to its EV strategy [2] EV Strategy and Charges - Ford announced a total of $19.5 billion in charges as it restructured its EV strategy, scrapping several costly projects and focusing on more affordable EVs [5] - The company expects around $7 billion in special charges over the next two years related to these changes, with most financial impacts anticipated in 2026 [5] Operational Outlook - Ford's Model e segment continues to operate at a loss, with EBIT losses narrowing to $4.8 billion in 2025 from $5.07 billion in 2024, and is projected to remain unprofitable through 2026 [7] - Management anticipates some cost relief in 2026, with tariff headwinds expected to ease to about $1 billion and additional savings from material and warranty cost reductions [8] 2026 Projections - Ford expects adjusted EBIT of $8-$10 billion in 2026, an increase from $6.8 billion in 2025, with adjusted free cash flow improving to $5-$6 billion [10] - The company generated $187 billion in revenue for 2025 and gained U.S. market share, holding $50 billion in liquidity to navigate challenges [10][21] Long-Term Growth Potential - Despite recent challenges, Ford's long-term growth narrative remains intact, with a focus on building higher-margin growth engines and a strong dealer network [17][20] - The company is shifting its EV strategy to focus on affordable models built on a cost-efficient platform, targeting segments with better demand and profitability [19] - Ford's balance sheet is robust, with nearly $50 billion in total liquidity, providing financial flexibility for future investments [21]