Ford CEO Jim Farley knew the EV pain would be bad, but the ‘punch line’ is a $4.8 billion loss: ‘The customer has spoken’

For months, Ford Motor CEO Jim Farley warned anyone who would listen that the electric vehicle transition was about to hit a wall, starting in September, when he predicted that the expiration of federal tax credits would cut the EV market in half. He said EVs would remain a “vibrant industry” but predicted they were “going to be smaller, way smaller than we thought.”

The turning point was what Farley called a “game changer”: the end of the $7,500 consumer incentive from the federal government, something that Farley saw cutting EV sales in the U.S. down to 5% of the industry from the current level of roughly 10% to 12%. (JD Power estimated that EVs represented 6.6% of new retail sales in January, suggesting the total picture is very close to what Farley predicted.)

On Tuesday, during Ford’s fourth-quarter earnings call, Farley presented the Detroit legacy manufacturer’s confirmation of his predictions: a $4.8 billion operating loss for the Model E electric vehicle unit. CFO Sherry House confirmed that the bleeding won’t stop there. The company expects the unit to lose another $4 billion to $4.5 billion in 2026, with the break-even target pushed back to 2029.

“The customer has spoken. That’s the punch line,” Farley told investors, validating his own grim forecasts...