Ford’s Massive EV Losses Are Shrinking as Its Electric Strategy Starts Paying Off

For years, Ford's electric vehicle business seemed stuck in a costly cycle. Analysts estimated the company was losing roughly $50,000 on every EV it sold, making profitability look like a distant goal. Now, however, the numbers suggest the situation is beginning to improve.

EV Losses Continue to Narrow

Ford reported a $777 million EBIT loss for its Model e electric vehicle division during the first quarter of 2026. While still a substantial deficit, company executives pointed to significant progress, noting that losses associated with its first-generation EV products fell by nearly 35%.

The automaker now expects full-year Model e losses to land between $4.0 billion and $4.5 billion. That's an improvement from the division's $4.81 billion EBIT loss recorded in 2025.

The improving outlook helped Ford raise its overall adjusted EBIT forecast for the year to between $8.5 billion and $10.5 billion.

Meanwhile, net income surged to $2.55 billion during the first quarter, compared with $471 million during the same period a year earlier. Revenue climbed to $43.25 billion.

Batteries Are Becoming a Business of Their Own

A major piece of Ford's profitability strategy extends beyond simply selling vehicles.

CEO Jim Farley has repeatedly highlighted Ford Energy as a critical component of the company's long-term financial plan. The business focuses on using battery technology and energy storage systems in applications beyond transportation.

Ford plans to invest approximately $1.5 billion into the initiative this year and expects to have more than 20 gigawatt-hours of energy storage capacity available beginning late next year.

The strategy allows Ford to generate revenue from battery investments that were previously viewed only as expenses tied to EV production. By supplying energy storage solutions for electrical grids and data centers, the company hopes to create an entirely new profit stream.

Ford Pro Remains the Company's Financial Engine

While Model e works toward profitability, Ford's commercial vehicle division continues generating substantial earnings.

Ford Pro delivered $1.69 billion in first-quarter EBIT while maintaining an 11.4% profit margin. The division also reached 879,000 paid software subscribers, representing a 30% increase compared with the previous year.

Revenue from software products and related services exceeded $15 billion last year. Ford expects that figure to continue growing at nearly 8% annually through the remainder of the decade.

A New EV Platform Could Change Everything

Ford's broader EV reset began in late 2025 when the company recorded $10.7 billion in Model e asset impairments.

Out of that restructuring effort emerged Ford's new Universal EV platform, which executives describe as a major step forward in efficiency and production costs. The company believes the architecture will allow future electric vehicles to be built much more economically than current models.

Production using the new platform is expected to begin at Ford's Louisville assembly plant in 2027.

Investors Are Paying Attention

Wall Street appears encouraged by Ford's recent progress.

The company's shares finished May at $17.44, representing a gain of 42.5% over the previous month and more than 70% over the past year. The stock also approached its 52-week high of $17.78.

Online investor sentiment has remained largely positive as well, reflecting growing confidence that Ford's EV business is moving in the right direction.

Challenges Haven't Disappeared

Despite the improving numbers, Ford still faces several obstacles.

Higher commodity prices, particularly aluminum costs, are expected to add more than $2 billion in expenses this year. Additionally, first-quarter results benefitted from a one-time $1.3 billion tariff-related credit that won't repeat in future quarters.

Even so, the overall trajectory appears much healthier than it did just a few years ago.

With Ford Pro generating strong profits, Ford Energy opening new opportunites, and Model e losses steadily declining, the automaker's electric vehicle business finally seems to be moving toward a more sustainable future. The days of massive per-vehicle losses may not be completely over, but they are becoming far less severe than before.

For Ford, that's a very diferent story than the one investors were hearing only a year ago.