Morningstar

Ford: Restructuring Electric Vehicle Program Costly but Likely Necessary

Ford now guides for its EV segment to be profitable in 2029.

A general view of the Ford logo on a vehicle.
Robert Cianflone via Getty
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Ford Motor Co
(F)

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Ford Motor F raised its 2025 adjusted EBIT guidance to about $7.0 billion on Dec. 15 and announced $19.5 billion of EV restructuring charges related to canceling three planned EVs (full-size pickup and two commercial vans) and ending a battery joint venture. Ford will also launch an energy storage business.

Why it matters: The move is a major pivot in Ford’s EV plans due to the end of the US EV tax credit and high battery costs, creating a path where Ford did not see enough EV demand to scale the Model e EV segment. Ford now guides for this segment to be profitable in 2029.

  • CEO Jim Farley highly touted the next-generation full-size EV pickup due in 2028, but it will not be built. A second generation F-150 Lightning, with over 700 miles of range, will instead come out at an unspecified date. The $30,000 midsize EV pickup will still launch in 2027.
  • The next Lightning will be an extended range EV that only runs on electric propulsion but is aided by a gas-powered generator. The BlueOval City plant under construction in Tennessee will still be built, but will now be the Tennessee Truck Plant, making yet-to-be-revealed affordable gas trucks in 2029.

The bottom line: We maintain our $16 fair value estimate and no-moat rating. Despite the massive write-offs, we think the market will like Ford giving a timeline on Model e profitability, and we think 50% of global volume from hybrids, EREVs, and EVs by 2030 better matches consumer preference.

  • The $19.5 billion will consist of $5.5 billion of cash charges, with $12.5 billion (noncash) taken in 2025. The final $7 billion will hit in 2026-27, but mostly in 2026, and we expect most of the cash outlays to be in 2026 with a small amount in 2027.
  • The unwinding of the BlueOval SK joint venture means Ford will wholly own a Kentucky battery plant. This plant will now be used for a new business, energy storage products for customers such as data centers. We consider this space crowded and, for now, give Ford no value for it in our model.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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