Ford Motor Company (NYSE: F) has announced its fourth-quarter and full-year financial results for 2024, showing both impressive revenue figures and significant challenges within its electric vehicle (EV) segment. After beating Wall Street's expectations, Chief Executive Officer Jim Farley stated, “Ford is becoming a fundamentally stronger company,” yet acknowledges the hurdles the automaker must overcome going forward.
For the fourth quarter, Ford reported revenue of $48.2 billion, surpassing analyst expectations of about $43 billion, marking a year-over-year rise of $2.2 billion. Throughout 2024, the company achieved total revenue of $185 billion, the highest figure recorded to date, and this led to a net income increase of 37% year-over-year to $5.9 billion.
Despite this financial success, the results came with stark challenges, particularly for Ford's Model e division, which lost $5.1 billion during 2024. The financial pressure on the electric vehicle market is notable, as Ford's CEO acknowledged the high costs associated with developing electric vehicles at current price points. “We lost about $37,000 on every electric vehicle sold during the quarter,” Farley remarked. This difficult situation is compounded by increased competition and pricing pressures on their aging F-150 Lightning and Mustang Mach-E models.
Ford's performance was bolstered by its traditional business units, with the Ford Blue segment generating $5.3 billion and the Ford Pro division posting around $9 billion, reflecting continued demand for its internal combustion engine vehicles and commercial offerings.
On the earnings call, Farley laid out the company’s expectations for fiscal year 2025, projecting adjusted earnings before interest and taxes (EBIT) between $7 billion and $8.5 billion. While management believes these targets reflect prudent optimism, they also indicate potential pressures from pricing challenges and material costs. CFO Sherry House indicated the forecast includes expectations of lower wholesales due to market conditions as well as anticipated reductions to warranty costs.
Looking at the competition, Ford faces increasing pressure not only from traditional rivals but from brands like Tesla, which continue to dominate the EV space. During 2024, Ford sold over 97,000 EVs, but this only positioned the company behind General Motors, which has maintained its lead as the second-largest seller of EVs across the U.S. market.
Investors are also alarmed by forecasts related to external factors, particularly the potential for new tariffs as President Trump considers imposing up to 25% tariffs on imports from Canada and Mexico. Such tariffs would significantly impact Ford’s operational framework, as the company produces vehicles across both borders. House acknowledged during the earnings call, “If the tariffs are implemented, it could create billions of losses, but we are working closely with government leaders to find optimal solutions.”
These market uncertainties have caused Ford's stock to dip by over 5% following the earnings release, reflecting investor concerns around the company's immediate future performance. Analysts characterized the mixed results as disappointing, especially when compared to the positive outlook provided by General Motors just days earlier.
Farley maintains optimism for future profitability improvements, stating, “We expect to make significantly more progress on our two biggest areas of opportunity – quality and cost,” as Ford aims to navigate the challenging automotive market successfully. Understanding the anticipated headwinds, Farley emphasized the seriousness of implementing cost-cutting measures and improving product quality to maintain market share.
The strategic focus on efficiency and investments should position Ford favorably against challenges from new products entering the market, including the Tesla Cybertruck and Chevy Equinox EV, both of which have garnered significant consumer interest.
Despite struggling with its Model e losses, Ford anticipates improving operational efficiency through significant investments and enhancements to its vehicle line-up. Analysts predict expectations will continue to evolve as Ford manages to translate its traditional strengths and burgeoning EV capabilities effectively.
Overall, Ford's fourth quarter and full-year financial results indicate resilience amid mounting challenges. By capping off the highest revenue year on record, the company is setting the stage for future endeavors, albeit with cautious foresight about the shifting dynamics of the auto industry.