Ford Motor Company has announced a revision to its earnings forecast for the year, predicting a slowdown in growth and further financial losses in its electric vehicle division as it seeks to manage operational costs more effectively.
On Wednesday, the automaker revealed that it anticipates its adjusted pretax income for the entire year will fall within the range of $7 billion to $8.5 billion. This marks a decline from the company’s adjusted pretax income of $10.2 billion reported for 2024.
The company has attributed this shift in expectations to “headwinds related to market factors.”
Ford is currently dealing with persistent challenges, such as elevated warranty expenses and difficulties in implementing cost reductions. During the third quarter of the year, Ford incurred $1 billion in accounting charges to adjust the value of assets linked to a scrapped three-row electric SUV project.
The Model e segment, which encompasses Ford’s electric vehicle initiatives, experienced a significant loss of $5.08 billion for 2024 as revenues plummeted by 35%, amounting to $3.9 billion. Forecasts for this year indicate that the EV sector could see losses ranging from $5 billion to $5.5 billion.
Ford noted that part of the losses in the Model e segment can be attributed to ongoing investments aimed at developing future products. Despite the losses, the automaker highlighted that it achieved $1.4 billion in net cost improvements, even as it increased spending on the establishment of new battery manufacturing plants and the launch of additional electric vehicle models.
Additionally, Ford’s outlook for its commercial vehicle division, Ford Pro, and its traditional gas and hybrid vehicle unit, Ford Blue, also reflects cautious projections.
For Ford Pro, the company estimates a full-year pretax profit between $7.5 billion and $8 billion, a reduction from the $9.02 billion it achieved in the current fiscal year. Meanwhile, Ford Blue is expected to generate pretax earnings between $3.5 billion and $4 billion, down from $5.28 billion this year.
Ford also disclosed its financial results for the fourth quarter, which surpassed analysts’ forecasts. However, the company’s outlook raised concerns among investors, leading to a 5.1% drop in the stock price of the Dearborn, Michigan-based automaker during after-hours trading. Throughout regular trading hours, shares fell by 1.5%.
