Ford narrows EV loss to $777M as cost cuts and Ford Energy ramp

Ford reported a Q1 Model e EBIT loss of $777 million, narrowing its roughly $50,000 per-vehicle EV loss as cost cuts and a new energy business took hold.

"Ford Energy is a key element of our bridge to 8% margin," CEO Jim Farley said. The company is investing $1.5 billion in the initiative this year and plans over 20 gigawatt hours of battery capacity starting in the fourth quarter of 2027.

Q1 net income jumped to $2.548 billion from $471 million a year earlier on revenue of $43.253 billion. Full-year adjusted EBIT guidance was raised to a range of $8.5 billion to $10.5 billion. The improvement came as Gen 1 EV losses fell nearly 35%, bringing the full-year Model e loss forecast to $4.0 billion to $4.5 billion, down from $4.81 billion in fiscal 2025.

Shares ended May at $17.44, up 42.5% over one month and brushing a 52-week high of $17.78. The narrowing EV losses reduce the cash burn that has weighed on Ford's valuation, though headwinds remain from roughly $2 billion in commodity costs tied to aluminum pricing.

Ford's commercial unit, Ford Pro, delivered $1.69 billion in Q1 EBIT at an 11.4% margin, with 879,000 paid software subscribers, up 30% year-over-year. Software and physical services revenue topped $15 billion last year and is projected to grow nearly 8% annually through the end of the decade.

The strategic reset began with $10.7 billion in Model e asset impairments in the fourth quarter of 2025. Out of that came the Universal EV platform, which Farley called "a step change in efficiency and cost, especially for the EV market." Production at Ford's Louisville assembly plant is slated for 2027.

The guidance raise shows management expects the EV cost trajectory to continue improving. Investors will watch the next quarterly report for updated segment margins and Ford Energy revenue contributions.

This article is for informational purposes only and does not constitute investment advice.