Lost $8.2 billion, with global sales surpassed by BYD. What exactly did Ford go through by 2025?

China Business News Reporter Liu Kai, Beijing

On February 10th, local time, Ford Motor Company released its 2025 financial report. The full-year revenue was $187.3 billion, marking five consecutive years of positive growth, but net profit attributable to the parent turned from profit to loss, dropping from $5.9 billion last year to -$8.2 billion. The core factor dragging down performance was in the fourth quarter, with a net loss of $11.1 billion, compared to a profit of $1.8 billion in the same period last year.

Ford stated that the underperformance was mainly due to significant impairments in electric vehicle (EV) business, a fire at aluminum suppliers, and unexpected tariff expenses. Additionally, sales data showed that in 2025, Ford’s global wholesale volume was about 4.4 million units, surpassed for the first time by BYD (002594), which sold 4.6 million units. This change in ranking vividly illustrates the competitive pressure faced by Ford’s electrification transition.

Electric Vehicle Strategy Shrinking

Financial data shows that Ford’s revenue in the fourth quarter was $45.9 billion, down 5% year-over-year. Adjusted earnings per share remained at 13 cents, lower than the market expectation of 19 cents. In December 2025, Ford announced a large-scale restructuring of its unprofitable EV business, recording a special charge of $19.5 billion, most of which was booked in the fourth quarter of 2025.

According to the announcement, due to lower-than-expected demand, high costs, and regulatory policy changes, the commercial value of some large electric vehicles has been affected, and Ford will cease production of these models. This decisive financial write-down is a concrete response to a business that has been bleeding losses. Ford’s EV business lost $4.8 billion in 2025, and the company expects this year’s losses to remain around $4 to $4.5 billion. Faced with such pressure, cutting early EV plans has become almost an inevitable choice.

So, where does this ongoing loss and strategic contraction originate? To a large extent, it is closely related to the sudden change in the external market environment. After the U.S. federal government canceled the up to $7,500 consumer tax credit, sales momentum in the EV market was significantly suppressed. Ford’s EV division head had to admit during a conference call, “The policy environment changed faster than we expected.” Against this market backdrop, Ford’s EV sales in the U.S. declined sharply. Its flagship models, such as F-150 Lightning and Mustang Mach-E, saw monthly sales drop by over 70% and 50%, respectively, in the second half of 2025. In contrast, competitors like Tesla managed to hold their market share through flexible price cuts during this period.

It is worth noting that Ford is not the only company at this crossroads; the entire traditional automaker industry seems to be undergoing a collective “revaluation of value.” General Motors also announced a charge of about $7.6 billion related to EVs, while Stellantis disclosed that its global product line adjustments cost as much as $26.5 billion. These massive impairments reflect market acceptance of EVs being lower than expected, forcing all players to reassess their investment return cycles and capacity planning.

Automotive industry analyst Zhao Yongqi told China Business News that although Ford has incurred losses in electrification, it does not mean the direction is wrong; rather, the pace and approach need adjustment. Future winners may not be the earliest movers but those who can adapt to change and find the best balance between traditional fuel vehicle profits and EV investments. Ford’s latest financial report may mark the beginning of this difficult balancing act.

Adding to the difficulties, some unexpected operational challenges have also emerged. One of Ford’s major aluminum suppliers experienced a factory fire at the end of 2025, causing a shortage of key raw materials, with full recovery not expected until late 2026. Ford CFO Sheryl House said these unforeseen shocks prevented the company from meeting its profit expectations for this year.

Transition to Diversification in Full Electric

In response to ongoing losses in the EV business, Ford is executing a strategic shift from aggressive full electrification to a diversified powertrain approach.

Ford revealed that hybrid technology has become a strategic focus. The company plans to significantly increase hybrid vehicle production in 2026, especially applying this technology to high-margin pickup trucks and SUVs. “We hear the market’s voice; consumers need transition solutions,” said Ford CEO Jim Farley during the earnings call. He expects that with cost reductions and the launch of more competitive models, performance in 2026 will improve.

Based on this strategic shift and cost-cutting plan, Ford provided a new profit outlook. The company expects an EBIT of $8 billion to $10 billion in 2026, within the analysts’ average expectations. Notably, this forecast already accounts for about $2 billion in tariff costs, mainly related to aluminum procurement, especially for the profitable F-150 series trucks.

To better share these costs globally and accelerate transformation, Ford is actively expanding cooperation models. In Europe, Ford is collaborating with Renault to produce EVs; in Asian markets, it is exploring technological partnerships. These collaborations can share R&D costs and speed up product launches. Meanwhile, Ford is also exploring EV infrastructure-related businesses. The company plans to shift some battery capacity toward energy storage systems for data centers and power grids, which is expected to generate new revenue streams.

These external collaborations and diversification efforts ultimately need to translate into market-competitive products. To this end, Ford has reorganized its R&D teams internally. A new team in California is developing an electric vehicle platform priced around $30,000, with plans to launch a redesigned electric pickup in 2026, seen as a key turning point for Ford’s EV business.

However, while Ford is busy with internal adjustments, the global competitive landscape has already undergone a landmark change. The latest sales data shows that BYD’s global sales in 2025 first surpassed Ford’s, with about 4.6 million units sold, ranking among the top automakers worldwide, while Ford’s wholesale volume was slightly below 4.4 million units. This surpassing is not just a ranking change but a clear quantification of the substantial pressure brought by new competitors centered on electrification.

This global shift is most directly reflected in China’s domestic market. In China, Ford’s market share has been continuously eroded by BYD, Geely, and other local brands. Data from the China Passenger Car Association shows that Changan Ford’s wholesale volume in China in 2025 was 121,500 units, with retail sales only 99,400 units—half of the 247,000 units sold in 2024—while Chinese EV brands’ market share continued to grow.

Zhao Yongqi said, “This is a strong signal that the game has changed. The core of competition has shifted from traditional brand and scale to the ability to vertically integrate the EV supply chain and iterate products quickly. BYD’s surpassing is the first strong validation of this new capability model in the global market. It puts dual pressure on Ford: to compete with Chinese brands in specific segments today, and to find a truly differentiated EV positioning for its global strategy in the future.”