Ford’s Electric Vehicle Bet: A Costly Gamble

According to the recently published financial report, Ford has reported a loss of approximately $5.1 billion (equivalent to about 130 trillion VND) in 2024. For 2025, the US automaker predicts a loss ranging from $5 billion to $5.5 billion. The company attributes this loss partly to the significant costs associated with developing its electric vehicle division. To accelerate its electrification efforts, Ford has approved an additional $1.4 billion investment in this sector.

Ford’s endeavors have yielded impressive results, with a 34.8% increase in electric vehicle sales in the US last year, totaling 97,865 units. Hybrid vehicles also witnessed a substantial surge of 40.1%, amounting to 187,426 cars. However, the majority of the company’s revenue still stems from traditional gasoline-powered cars, with 1,793,541 units sold, reflecting a modest 0.2% growth compared to 2023.

In 2024, the Ford F-Series maintained its position as the best-selling vehicle line in the US market, with 765,649 vehicles delivered to customers. Nonetheless, CEO Jim Farley acknowledges the challenges in sustaining this success during the electrification transition, as large electric vehicles have inherent drawbacks that remain unresolved.

Farley points out that larger electric vehicles have inferior aerodynamics and are heavier than their gasoline counterparts, necessitating larger and more expensive batteries to achieve competitive range capabilities. The company is focusing on technological advancements rather than rushing to launch new electric models. Recently, Blue Oval announced a delay in introducing its new mid-size pickup truck, pushing back its release to 2027, approximately 18 months later than initially planned.

In February 2024, Farley disclosed the formation of a new research team dedicated to developing a cost-effective platform for electric vehicles to compete with Tesla and Chinese automakers. Additionally, engineers are exploring extended-range electric vehicles (EREVs) that utilize gasoline engines as generators to charge the batteries.

Ford’s 2024 activity report also revealed the cancellation of plans to launch a three-row electric SUV due to market demand considerations, resulting in a $1.9 billion loss. In an interview in August 2024, John Lawler, Ford’s Chief Financial Officer, elaborated on the decision to terminate the project:

“We looked at customer demand, cost structure, pricing. We realized we couldn’t create a vehicle that would be profitable in the first 12 months, so the plan was canceled.”

The evolving landscape of the electric vehicle market has not only posed challenges for Ford but also for other industry players. Stellantis has recently indicated its willingness to consider producing internal combustion engine versions of its electric vehicles if market demand warrants it.

Mercedes-Benz has also expressed skepticism about the push for electric vehicles, while General Motors (GM) grapples with issues related to its Ultium platform for electric vehicles.

Thai Son (Tuoitrethudo)