Supplier fire adds to cost pressures
Further pressure came from last year’s fires at a Novelis aluminum plant in New York that feeds Ford’s high-margin F-Series pickup line. The facility, still not expected to return to full capacity until mid-2026, forced Ford to source aluminum from higher-tariff regions. Chief Financial Officer Sherry House estimated the disruptions reduced second-half 2025 earnings by roughly $2 billion. She said Ford anticipates a one-time benefit of about $1 billion in 2026 as normal operations resume, but the savings will be offset this year by additional tariff payments necessary to secure alternative metal supplies.
Ford now projects its overall tariff exposure will hold at approximately $2 billion in 2026, flat with 2025. The company characterized the aluminum issue as temporary, stressing that long-term supplier relationships remain intact.
Full-year 2025 results and special items
On an unadjusted basis, Ford recorded an $8.2 billion net loss in 2025, its largest annual deficit since 2008. The figure includes $15.5 billion in fourth-quarter special charges, most of which are tied to a previously announced slowdown in all-electric vehicle investment. Excluding those one-time items, full-year adjusted EBIT reached $6.8 billion.
Total 2025 revenue edged up 1 percent year over year to a record $187.3 billion, reflecting strength in Ford’s core gasoline and commercial businesses. However, the sharp fourth-quarter loss of $11.1 billion, or $2.77 per share, contrasted with net income of $1.8 billion, or $0.45 per share, registered in the final quarter of 2024. Adjusted earnings for the latest quarter settled at $0.13 per share after factoring out special items.
Segment outlook: conventional and fleet units carry the load
Looking at 2026, Ford expects its traditional internal-combustion division, known internally as “Ford Blue,” and its commercial arm, “Ford Pro,” to shoulder the bulk of profitability while the electric-vehicle unit remains in the red. The company projects:
- Ford Pro pre-tax earnings: $6.5 billion–$7.5 billion
- Ford Blue pre-tax earnings: $4 billion–$4.5 billion
- Model e (electric vehicles) pre-tax loss: $4 billion–$4.5 billion
Those estimates suggest that conventional and fleet operations will again offset losses from battery-electric programs, a trend that has characterized Ford’s profit mix in recent years. Similar patterns have emerged across the industry as legacy automakers recalibrate EV spending in response to slower-than-projected consumer adoption. A recent Reuters analysis noted comparable pullbacks by several global peers.
Guidance for 2026: higher EBIT and cash flow
Management laid out a 2026 plan that envisions adjusted EBIT rising to $8 billion–$10 billion from $6.8 billion in 2025. Adjusted free cash flow is forecast at $5 billion–$6 billion, compared with $3.5 billion last year, while capital expenditures are expected to increase to a range of $9.5 billion–$10.5 billion from $8.8 billion. Chief Executive Officer Jim Farley said those figures underscore improving fundamentals even as Ford absorbs exceptional charges and temporary cost spikes.
The company did not issue detailed quarterly guidance but indicated that first-half 2026 results will continue to feel the aluminum-related tariff pinch, with more meaningful gains materializing once the Novelis facility is fully restored.
Capital allocation and investment priorities
Although Ford trimmed some near-term electric-vehicle spending, it remains committed to long-term electrification, connectivity and software initiatives. Capital allocated for 2026 will fund refreshed versions of the F-Series, expanded commercial services through Ford Pro and targeted EV projects aligned with what the company calls “demand-driven growth.” No changes were announced to Ford’s regular dividend policy.
House emphasized that the balance sheet remains healthy, supported by steady cash generation and access to credit markets if needed. At year-end, automotive cash totaled $29 billion against $20 billion in debt, leaving Ford with ample liquidity to navigate near-term volatility.
Comparative perspective and historical context
The $8.2 billion 2025 net loss stands as Ford’s worst annual performance since the Great Recession. For context, Federal Reserve data show that U.S. vehicle sales slumped precipitously in 2008-09 as the broader economy contracted, forcing large-scale industry restructuring. While current conditions differ markedly—overall U.S. auto demand remains stable—the comparison highlights the magnitude of Ford’s recent special-item impact.
Analysts will monitor whether the company can achieve its 2026 recovery plan without further surprise charges. Key variables include resolution of the aluminum supply issue, the pace of EV market growth and macroeconomic factors such as interest rates that influence vehicle affordability.
Next steps for investors and stakeholders
Ford’s management will host its customary investor call to elaborate on cost controls, product launch schedules and capital strategy. With tariff expenses expected to normalize and special charges related to EV recalibration largely booked, the company argues that core earnings momentum should become more visible over the coming quarters.
Operating execution in Ford Pro and Ford Blue will remain central to meeting 2026 targets, while leadership continues to reassess the cadence of new battery-electric models in line with consumer acceptance and regulatory timelines. Any further disruptions to critical suppliers such as Novelis could present upside or downside risk to the current outlook.
Crédito da imagem: Anadolu Agency
