Ford Motor Company (F) is hitting the brakes on its electric vehicle strategy, and Wall Street is calling it a sensible move in a market that's cooled faster than anyone expected.
What's Happening
RBC Capital Markets analyst Tom Narayan maintained his Sector Perform rating on Ford with a $12 price target, praising the automaker's restructuring as it pivots away from an aggressive EV push. The analyst's take? This is what adapting to reality looks like.
The changes coming to Ford's EV operations are substantial. The company is exiting its BlueOval SK joint venture entirely, taking ownership of two EV battery plants in Kentucky, cancelling three planned electric models, and ending production of the F-150 Lightning. That's a lot of strategic reversals packed into one announcement.
In place of pure EVs, Ford plans to expand hybrid offerings and shift focus to what it's calling a "flexible, affordable Universal EV Platform." The goal is reaching 50% hybrid, extended range EV, and electric sales by 2030—a more cautious timeline than its previous ambitions.
The Financial Hit
This pivot doesn't come cheap. Narayan expects Ford will take a pre-tax asset write-down of $8.5 billion in the fourth quarter, with a total impact of $19.5 billion on EBIT and $5.5 billion on cash. Those are eye-watering numbers, but the analyst frames them as necessary pain.
Ford now anticipates its Model E segment will reach profitability by 2029, with improvements beginning in 2026. Management also raised 2025 adjusted EBIT guidance to around $7 billion, up from $6.25 billion previously—a silver lining in an otherwise sobering update.
Why This Makes Sense
The Model E segment lost $1.4 billion in the third quarter and $1.3 billion in the second quarter. Narayan had previously estimated EV losses of $4.9 billion for 2025 alone. At that burn rate, something had to give.
"We believe this strategic adjustment is a rational response to the slowing EV market, particularly in the context of the current regulatory landscape and the removal of the $7,500 EV tax credit last September," Narayan wrote.
If Model E reaches breakeven by fiscal 2029, it could provide a $4.9 billion boost to Ford's EBIT, helping offset the $5.5 billion in net debt expected in fiscal 2026.
The analyst did sound one note of caution: Ford's impairment is twelve times larger than GM's, and retooling manufacturing plants toward internal combustion engines and hybrids could be a lengthy process given the scale of the Model E segment.
Market Reaction
Ford stock closed up slightly at $13.67 on Tuesday, hitting a new 52-week high of $13.99 during the session. Shares are up 41.7% year-to-date in 2025, suggesting investors are comfortable with the company's more pragmatic approach.
