Ford's F long-term strategy extends well beyond building vehicles. The company is investing in software, connected services and new businesses such as Ford Energy. But its core automotive business remains the company’s most important pillar. Ford's execution suggests the core automotive business is becoming more efficient and profitable.
Ford On Track for $1B Cost Savings
Ford has been working to fix one of its biggest weaknesses—high warranty and material costs. Since 2024, the company has meaningfully reduced both, and management expects another $1 billion of cost savings in 2026.
This matters because warranty costs are closely tied to product quality, while lower material costs directly support margins. Ford is achieving these savings even as it prepares for an aggressive product launch cycle over the next three years.
Trucks: Ford's Biggest Advantage
Ford's truck business remains the backbone of its automotive operations.
The F-Series outsold its closest competitor by more than 80,000 units in the first half of the year and remains on track to retain its position as America's best-selling truck for the 50th consecutive year. But it’s not just the F-Series model. Ford’s lineup stretches from the entry-level Maverick to the Super Duty, allowing the company to compete across multiple price points. With new versions of the F-Series and Super Duty on the way, Ford also has a healthy product pipeline.
The company is seeing similar momentum in off-road vehicles. In the last reported quarter, Bronco, Tremor and Raptor accounted for roughly 25% of U.S. sales. These models carry higher margins while attracting younger and more affluent buyers, helping Ford improve both profitability and its customer mix.
F’s Hybrids & Commercial Vehicles Strength
Ford is also benefiting from strong demand for hybrids. The F-150 hybrid leads the full-size pickup segment. Ford claims that its Maverick hybrid became America's best-selling hybrid pickup in the first half of 2026. The company plans to expand hybrid variants across its lineup, giving customers more options before they fully switch to EVs.
The commercial vehicle business is another important strength. Ford Pro remains the market leader in North America and Europe. The Oakville expansion—anticipated to be launched in the fourth quarter of 2026— is expected to add up to 100,000 units of Super Duty capacity. The additional production should support revenue and earnings growth.
Ford EV Business Economics Improving
Ford Model e is still losing money, incurring a $919 million EBIT loss in the last reported quarter. However, the loss narrowed 31% year over year, marking the third consecutive quarter of improvement. Management is reducing costs, aligning production with demand and focusing on affordable EVs instead of chasing volume.
Under its upcoming UEV platform, Ford plans to launch vehicles starting at around $30,000, with customer deliveries beginning next year. If Ford can improve profitability while scaling these vehicles, the EV business could gradually become less of a drag on overall earnings.
Investor Takeaway
Ford's software and adjacent businesses may drive the next phase of growth, but the investment case today rests on its core automotive business. Lower costs, a dominant truck franchise, strong hybrid demand and a resilient commercial vehicle business are making the business stronger. If Ford continues to execute on these areas, it will be in a much better position to fund its future growth while delivering solid earnings.
Competition Is Heating Up
Ford's leadership in trucks remains a major strength, but the competition isn't standing still.
General Motors GM continues to rely heavily on its gas-powered trucks and SUVs to drive earnings. The GMC Sierra posted record quarterly sales, while Chevrolet's Silverado remained one of the best-selling pickups in the market. With next-generation versions of both models in the pipeline, General Motors is positioning itself to defend its share in the highly profitable full-size truck segment. The company has also maintained pricing discipline, keeping incentives below the industry average for more than three years, which has helped protect margins despite ongoing cost pressures.
Stellantis STLA is also gaining momentum. U.S. sales rose in the second quarter, supported by an 11% increase in Ram pickup sales. Stellantis has set an ambitious goal of selling 825,000 Ram trucks annually in North America by 2030, highlighting its intent to strengthen its position in one of the industry's most lucrative categories.
If Ford has to maintain its truck leadership, it will have to keep executing rather than relying on its legacy position. Upcoming launches of the next-generation F-Series and Super Duty, along with continued investment in hybrids and commercial vehicles, bode well for the company.
The Zacks Rundown on Ford Stock
Shares of Ford have gained more than 7% over the past six months, outperforming the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, Ford trades at a forward price-to-sales ratio of 0.32, lower than the industry. It carries a Value Score of A.
Image Source: Zacks Investment Research
See how the Zacks Consensus Estimate for Ford’s EPS has been revised over the past 60 days.
Image Source: Zacks Investment Research
F stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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