Ford has written off $19.5B (36% of its market cap) on electric vehicles after losing $13B since 2023.
Tesla’s market value reaches US$1.63T. That’s 30 times Ford’s valuation.
Ford discontinued the F-150 Lightning because it couldn’t profitably meet factory capacity requirements.
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when Ford (NYSE: F ) announced $19.5 billion in write-offs on its electric vehicle business, but shareholders aren’t panicking. They exhaled. The stock barely flinched, trading near its 52-week high of $13.67, as investors breathed a sigh of relief that Ford was finally no longer burning cash in a battle it was never ready to win.
The write-offs accounted for 36% of Ford’s total market capitalization of $54.5 billion. This is not a rounding error. This amounts to an admission that all of Ford’s bets on electric vehicles were fundamentally mispriced from day one. The company has lost $13 billion on electric vehicles since 2023 alone, with the Model E unit losing $1.4 billion in the third quarter of 2025. Chief Financial Officer Sherry House admitted in October that “the only real way to improve first-generation vehicle profitability is through one or more of the following: pricing, new cost reductions and increased fixed cost leverage.” Two months later, Ford gave up entirely.
This is not a story about whether electric cars are the future. It’s about Ford’s inability to make them profitably Tesla (NASDAQ: TSLA ) Think of the factory as a product in itself. Tesla’s Shanghai Gigafactory has just produced its 4 millionth car, leading the industry in efficiency, and the Berlin factory has become Tesla’s most efficient factory in the world. Meanwhile, Ford renamed its Tennessee electric vehicle center the “Tennessee Truck Plant” to build gasoline-powered trucks.
Tesla’s market value reached $1.63 trillion last week, 30 times Ford’s valuation, the same day Ford announced its exit from the electric vehicle business. Deepwater Asset Management’s Gene Munster puts it perfectly: “Ford’s exit from electric cars will benefit Tesla, making it harder for Ford to build self-driving cars.” The Future Fund’s Gary Black is more blunt: “Ford won’t make money…Ford’s move to hybrids means it’s admitting it can’t profit from rolling out an EV brand extension.”
Just six weeks before the write-off, CEO Jim Farley sounded confident on Ford’s third-quarter earnings call. He touted the company’s universal EV platform “with a starting price of around $30,000” and claimed that “procurement is now 95% complete.” He promised to launch new products in the first quarter. This optimism is as old as milk.
The problem is not changes in consumer demand. The problem is that Ford never understood the actual need to build an electric car. They replace existing gas-powered trucks with electric drivetrains and expect customers to pay a premium for vehicles that cost more to build than they sell for. The F-150 Lightning, once the best-selling electric pickup truck in the U.S., is no longer in production. Ford couldn’t fill that plant’s capacity because the economics simply didn’t work out.
Ford isn’t the only company experiencing setbacks in electric vehicles. General Motors (NYSE:GM) third-quarter revenue fell 0.3% year over year, even as the company better managed the transition with more credible electric vehicle commitments. Strantis (NYSE: STLA ) faces similar profitability challenges. even toyota (NYSE: TM) and Honda (NYSE: HMC ) is cautious about its commitment to all-electric vehicles and is hedging with hybrids.
But here’s what Detroit should be afraid of: The Chinese are coming. BYD, Geely and Nio are all vertically integrated manufacturers launching new electric vehicles at a pace that makes traditional automakers look exhausted. BYD has received approval for 38 new cars in China this year. Tesla got three. Ford got zero, and that’s important. These Chinese manufacturers are the White Walkers from Game of Thrones, and winter is coming whether Detroit is ready or not.
Ford’s move toward hybrids and “affordable electric vehicles” sounds pragmatic, but it’s a retreat to defend shrinking territory. The company currently expects that by 2030, 50% of its global sales will be hybrid, extended-range electric vehicles or fully electric vehicles. This is not a strategy. It’s hedging every bet because you don’t know which one will pay off.
The market’s lukewarm reaction to the write-offs suggests investors view Ford as a 4.4% dividend stock rather than a growth company. With margins of 2.48% and a price-to-sales ratio of 0.29, Ford is priced like a company in a managed decline. The $19.5 billion write-off just officially took effect.
Farley said it’s a “customer-driven transformation to create a stronger, more resilient and more profitable Ford.” Translation: We’re falling back on what we know because we can’t compete on what’s next. Whether Ford accepted this write-off or not, they were never on track. The numbers prove it. The game proved it. Now, Ford finally admits it.
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