Ford Motor (F) is phasing out its popular Escape SUV as part of a high-stakes push to “recharge” its electric vehicle ambitions. Calling this its “Model T moment” earlier this month, the car maker is committing $5 billion to launch an affordable electric truck. Yet, given Ford’s history of inefficiencies in EV manufacturing, executing this vision will demand a complete operational overhaul.
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From where I stand, the move looks less like bold innovation and more like desperation dressed up as strategy—leaving me Bearish on the stock until tangible progress proves otherwise.
A Tale of Three Segments
Ford’s first-generation EVs have already cost the company billions, exposing a hard truth: its traditional manufacturing model simply doesn’t align with a profitable electric future. Today, the automaker is split into three distinct segments with separate P&Ls—Ford Blue (legacy ICE and hybrids), Ford Model E (electric), and Ford Pro (commercial). Ford’s Q2 2025 results clearly highlighted the contrasting performance of its divisions, underscoring the company’s internal tug-of-war
Ford’s electric division remains deeply unprofitable, posting an EBIT margin of -56.4% in Q2—an “improvement” from last year’s staggering -99.9%. In practical terms, that meant a $1.15 billion loss on just $1.2 billion in revenue. While harsh, it’s not unexpected. Since its formal launch in March 2022, Ford Model e has faced the steep challenge of building EV profitability from the ground up—something that even Tesla (TSLA) only achieved after years of persistence. For now, the segment’s heavy losses are being propped up by Ford’s more established businesses, particularly Ford Pro.
Ford Blue, the company’s legacy ICE and hybrid division, remains a steady cash generator with staples like the F-Series and Mustang. Still, its Q2 EBIT of $661 million reflects pressure from intensifying competition. By contrast, Ford Pro continues to shine, delivering $2.3 billion in EBIT on $18.8 billion in revenue, translating into a substantial 12.3% margin.
Doubling Down on a Money Pit
The stakes couldn’t be higher for one of America’s most iconic automakers. Ford’s $5 billion EV push nearly matches the Model e division’s entire operating loss in 2024. In effect, the company isn’t just investing in its future—it’s doubling down on a segment that continues to hemorrhage cash.
While the idea of a $30,000 electric truck is undeniably appealing, the reality is that achieving it requires a radical reengineering of Ford’s manufacturing model. And with the company shelving proven moneymakers like the Escape and Lincoln Corsair in the process, the move feels less like bold innovation and more like a gamble born of necessity.
Rewiring an Inefficient Past
Ford is allocating $2 billion to modernize its Louisville Assembly Plant and another $3 billion toward the BlueOval Battery Park in Michigan. Central to this overhaul is a new manufacturing approach dubbed the “assembly tree,” which breaks vehicles into three major sections built in parallel before merging for final assembly. The company claims this process could cut production times by up to 40%.
The motivation is clear: Ford’s first-generation EVs were hampered by inefficient manufacturing, leaving them uncompetitive on cost. This $5 billion reinvestment is, in many ways, an admission of past failure—and a bid to leapfrog its own industrial shortcomings just to keep pace with rivals that have already set the benchmark.
Inspecting Ford’s Valuation
Turning to valuation, Ford currently trades at a P/E ratio of 14.8, representing roughly a 30% discount to the broader Consumer Discretionary sector. Within the automotive space, however, peer valuations show significant divergence.
As a major automobile bellwether and carrying a similar level of iconic status, General Motors (GM) stock serves as a useful benchmark with which to gauge Ford. Over the trailing twelve months, GM delivered 5.3% YoY revenue growth versus Ford’s 2.7%, along with a healthier 5.6% EBIT margin compared to Ford’s 1.56%.
The fact that Ford trails GM on both growth and profitability suggests that its relatively higher valuation is heavily tied to expectations of future success. Put simply, the market appears willing to overlook the steep, ongoing losses in Model e on the belief that Ford will engineer a dramatic turnaround.
Is Ford Motor Stock a Buy, Sell, or Hold?
On Wall Street, Ford stock carries a consensus Hold rating based on two Buy, eight Hold, and two Sell ratings in the past three months. Ford’s average stock price target of $10.60 implies a downside potential of almost 10% over the next 12 months.
Ford’s Big EV Bet Smells of Desperation
Ford’s vision is ambitious and bold, but it also reeks of desperation—a strategy born out of necessity rather than choice. The relentless losses in its Model e division have left the company with little option but to tear down its old playbook, even if it means sacrificing two of its successful SUVs.
Now Ford faces the daunting task of mastering a revolutionary manufacturing process while battling intense competition and navigating wavering consumer demand for EVs. For my part, I’d rather stay on the sidelines and look for near-term short opportunities until there’s concrete proof that this high-stakes gamble is evolving into a sustainable turnaround worthy of a medium- to long-term position.