Auto giant Ford reported its worst quarterly earnings in four years on Tuesday, and a net loss of $8.2 billion for 2025, the largest yet since the 2008 recession.
At least some of that is due to the $4.8 billion that the company’s electric vehicle division lost in 2025.
Electric vehicle sales were battered, and previous corporate plans were shattered across the industry this year following the Trump administration’s push to slash a $7,500 federal EV tax credit that was signed into law by former President Biden in 2022.
Ford was one of many automakers committed to an electrified future that was hit hard by the decision. In response, the company said that it will pivot from full electrification to partial electrification, and in December announced a major scaleback of its electric vehicle plans, which included killing the electric pick-up truck F-150 Lightning.
“I think the customer has spoken. That’s the punchline,” Ford CEO Jim Farley said in an earnings call on Tuesday.
The outlook is still looking bleak. Company executives said they expect to lose $4-4.5 billion more in 2026, and no expectation to breakeven until around 2029.
In the absence of a tax credit, Ford and other automakers, such as GM, are betting on two things to spur customer demand in the U.S.: affordability and autonomous driving.
At the core of that plan is a $30,000 electric vehicle with “eyes-off” driving that Ford plans to unveil in 2028.
That would be cheaper than Tesla’s current affordable offerings, which are priced upwards of $36,000, and are still more expensive than their premium versions were with the EV tax credit.
But the story is different overseas, Farley said.
“I think the real question that I ask myself is ‘how will the Chinese change the game?’” Farley said.
While the American EV industry suffers, Chinese electric vehicle giants enjoy government subsidies that give them at times dangerously good pricing power. Chinese EVs go for unbelievably low prices, and while they are not allowed to be imported into the United States, the low pricing has made it very tough for American EV makers to compete elsewhere in the world. Even long-term American ally Canada decided last month to allow Chinese EV imports.
With the announcement of Tuesday’s earnings report, Chinese EV giant BYD beat Ford in 2025 global vehicle sales for the first time.
Ford is intent on trying to bridge this gap with Chinese automakers. According to a Reuters report from last week, the auto giant is in talks with China’s Geely for a potential partnership.
The Trump administration’s decision to slash the EV tax credit wasn’t the only government action causing pain in Ford’s profits. The automaker was also impacted by tariffs. An unexpected tariff provisions change in late December caused Ford to receive less tariff relief than expected, ultimately doubling its tariff-related costs to $2 billion.
But executives are optimistic going into the new year.
“We anticipate a more stable policy environment for partnership with the administration this year, especially given a reset in the emission standards,” Farley said.
That reset that Farley is talking about is Trump’s rollback of former President Biden’s tightening of the Corporate Average Fuel Economy (CAFE) standards, a move that rejoiced some automakers and oil industry groups but was widely condemned by environmentalists and climate change activists. Farley had joined Trump in the December announcement.
