Ford Motor Company (F +1.15%) stock is trading up more than 17% this year, but its performance somewhat obscures the fact that the company faces both challenges and opportunities that define its viability as an investment. They center around its electric vehicle (EV) strategy.
How Ford makes money
The company has been largely unsuccessful in its EV aims so far. First, its Model e business remains heavily loss-making (see table below). Second, the strategy of legacy automakers releasing EV versions of highly successful internal combustion engine (ICE) vehicles received a setback, as disappointing sales of Ford's F-150 Lightning pickup truck have shown. Ford is reportedly considering ending production of the electric pickup truck.
Image source: Getty Images.
Third, Ford's aim (outlined in 2019) of having commercial self-driving cars in 2021 didn't happen, and Ford is no longer a primary developer in the market.
|
First Nine Months 2025 Segment |
Revenue |
Earnings Before Interest and Taxation |
|---|---|---|
|
Ford Pro |
$51.4 billion |
$5.6 billion |
|
Ford Blue |
$74.8 billion |
$2.3 billion |
|
Ford Model e |
$5.4 billion |
($3.6 billion) |
Data source: Ford presentations.
Investing in Ford
Ford's value lies in its commercial, government, and rental customer business, the Pro segment. That gives Ford a moat, as EV adoption in the commercial van and truck sector has been held back by the extra weight of EVs and the need to keep vans/trucks running and refueled quickly.
NYSE: F
Key Data Points
However, the advantages of ICE vehicles won't last forever, as EV technology continues to improve. Moreover, CEO Jim Farley's commitment to investing $5 billion in developing a universal EV platform and a $30,000 pickup by 2027 acknowledges Ford's need to be relevant in the EV age.
It's the right thing to do, but it remains a bet in an area where Ford has, thus far, failed to deliver. As such, Ford stock will only attract value investors willing to accept potential downside. At $13, Ford trades at 12.5 times its estimated 2025 earnings. That may seem cheap, but it will be expensive if its big EV bet fails.
