Ford’s EV business faced a tough year. The company’s EV unit lost $4.8 billion in 2025. That number sent a clear message. As the CEO put it, “The customer has spoken.”
Sales of Ford’s electric models fell during the year. The Mustang Mach-E, F-150 Lightning, and E-Transit saw a combined decline of 14% compared to 2024. As a result, the company is now changing its electric vehicle strategy.
Instead of focusing mainly on expensive, high-profile electric models, Ford is shifting toward lower-cost, high-volume vehicles. At the same time, it is putting more attention on hybrid vehicles. This marks a big change from its earlier approach.
Early EV Ambitions Fell Short
Ford was one of the first traditional American carmakers to take on Tesla directly in the electric vehicle space. It did so by electrifying two of its most famous models. The Mustang Mach-E arrived in December 2020. It was designed to compete with Tesla’s popular Model Y. Then, in mid-2022, Ford introduced the all-electric F-150 Lightning.
The idea seemed simple and powerful. Take two iconic nameplates and turn them electric. Ford believed brand loyalty and government subsidies would help offset the higher prices of electric vehicles.
At first, excitement was strong. Ford reported nearly 200,000 reservations for the F-150 Lightning. The company projected it could sell 150,000 units per year. That early demand created optimism. However, the high sales numbers never fully materialized.
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In 2025, Ford sold 27,307 F-150 Lightnings. That marked an 18.5% drop from the previous year. The Mustang Mach-E sold 51,620 units, which remained roughly flat compared to 2024.
The numbers became even more concerning after the $7,500 federal tax credit ended in September. That incentive had helped lower the effective cost of EVs for buyers. For example, estimated F-150 Lightning sales dropped sharply. In December 2024, Ford sold 5,197 units of the electric truck. One year later, in December 2025, that number fell to just 1,724 units.
At the same time, overall EV demand in the United States slowed. Meanwhile, interest in hybrid vehicles increased. Ford sold 84,934 hybrid F-150 trucks in 2025. That figure represented a 15% increase from the year before. These numbers showed a clear contrast between fully electric and hybrid demand.
Strategy Reset: Hybrids and Extended-Range Models
After seeing the sales data, Ford decided to adjust its plans. The company has ended production of the all-electric F-150 Lightning for now. It plans to bring the truck back later as an extended-range electric vehicle, also known as an EREV. An EREV uses a battery to power the vehicle.
However, it also includes a gas generator onboard. This setup helps recharge the battery and extend driving range. Many early buyers of the F-150 Lightning raised concerns about range and towing capacity. Large trucks often need to tow heavy loads. Pure electric systems and plug-in hybrids were seen as less suitable for these demanding tasks.
The extended-range model aims to address those issues. It is expected to offer improved range and better towing performance. At the same time, Ford is placing stronger emphasis on hybrid vehicles across its lineup. Hybrids combine a gasoline engine with an electric motor.
This approach gives drivers better fuel efficiency without requiring full dependence on charging stations. The sales data from 2025 showed growing demand for hybrids. Therefore, Ford is aligning its production plans with what customers appear to prefer.
A New Plan for Cheaper Electric Vehicles
While Ford is leaning into hybrids, it is not abandoning electric vehicles. Instead, it is redesigning its EV strategy. The company is developing a new “universal” EV platform. This platform is designed to support lower-cost, high-volume vehicles. The goal is to build electric models that are more affordable and easier to produce at scale.
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The first vehicle based on this new platform is expected to be a midsize pickup truck priced at around $30,000. Ford plans to launch this model in 2027. In total, the company intends to build at least five vehicles using this platform. These could include SUVs and commercial vans.
The focus now is on cost efficiency. Ford has made it clear that it does not want to build vehicles simply to meet regulatory requirements. Instead, it aims to create electric vehicles that can generate profitable growth.
The broader auto industry is also moving in this direction. Several major automakers are preparing to launch EVs priced below $50,000 this year. The shift toward more affordable models reflects changing market demand.
Despite these changes, Ford expects its EV business to continue losing money for several more years. The company is targeting break-even for the EV segment around 2029.
Recent financial results added to investor concerns. Ford reported adjusted earnings of 13 cents per share for the quarter. Analysts had expected 19 cents per share. The gap represented a noticeable miss. However, guidance for 2026 points to year-over-year increases in cash flow and higher capital expenditures.
These financial indicators are closely watched by investors. The $4.8 billion loss in 2025 underscored the challenges of transitioning to electric vehicles. Slowing EV sales, the end of federal tax credits, and rising hybrid demand have all influenced Ford’s new direction.
Now, the company is reshaping its electric strategy. It is focusing on hybrids, extended-range electric trucks, and a new generation of lower-cost EVs. As the CEO stated during the earnings call, the numbers made the situation clear. In his words, “the customer has spoken.”
