Ford's F efforts to improve the profitability of its electric vehicle (EV) business are beginning to yield results, with lower losses on its first-generation (Gen-1) products supporting a gradual recovery in Model e.
In the third quarter of 2026, the segment incurred an EBIT loss of $1.06 billion, narrowing 25% from $1.41 billion in the prior-year quarter. The improvement came despite a 31% decline in revenue to $1.22 billion, reflecting lower wholesale volumes and unfavorable product mix. Ford's focus on rightsizing Gen-1 production, reducing structural costs and improving pricing is helping contain losses as it transitions toward its next-generation EV portfolio.
Ford’s Gen-1 Cost Reductions Support Improvement
Ford's ongoing efforts to align production with market demand and reduce the cost base of its first-generation EV portfolio are driving progress. During the third quarter, Model e wholesale volumes declined 31% year over year to 34,000 units, primarily due to the discontinuation of the F-150 Lightning and production adjustments for the Mustang Mach-E.
However, lower Gen-1 product losses and favorable net pricing helped improve EBIT by $352 million year over year. Management also highlighted that Mustang Mach-E recorded its lowest spending level since 2023, reflecting tighter cost controls and disciplined production management.
Ford remains on track to improve Gen-1 EBIT by approximately 40% year over year in 2026. This reflects its strategy of balancing production and pricing with underlying market demand while realizing savings from a rightsized manufacturing footprint. Although continued cost reductions should support progress, achieving its 2029 Model e breakeven target will depend on disciplined spending and successful execution of its next-generation EV strategy.
Ford's efforts to narrow EV losses reflect a broader industry shift toward improving EV economics through cost reductions and production adjustments. General Motors GM is following a similar path. During the third quarter of 2026, General Motors' EV-related net realizable value inventory adjustments declined by $400 million year over year, while EV strategic realignment charges fell to $238 million from $1.59 billion in the prior-year quarter. For full-year 2026, General Motors expects EV losses to improve by $1-$1.5 billion, reflecting continued efforts to optimize its EV manufacturing footprint and control costs.
Meanwhile, Stellantis N.V. STLA is also focusing on structural cost reductions and manufacturing efficiencies to improve profitability. Under its Value Creation Program (VCP), the automaker is targeting €6 billion in annual cost savings by 2028 compared with its 2025 baseline. In the third quarter of 2026, the program continued to deliver savings, with management expecting fourth-quarter benefits in the mid-hundreds of millions of euros, approximately double the third-quarter level. Stellantis is also optimizing its manufacturing footprint and production capacity to reduce underutilized facilities and improve operating efficiency.
The Zacks Rundown for Ford
Shares of F have plunged 6.1% in a year compared with its industry’s 1.9% decline.
Ford is currently trading at a forward 12-month price-to-sales of 0.28X, lower than the industry’s average of 3.57X. It carries a Value Score of A.
The Zacks Consensus Estimate for F for 2026 earnings implies year-over-year growth of 74.3%.
The consensus estimate for EPS for fiscal 2026 has moved northward over the past 60 days.
F currently carries a Zacks Rank of #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here
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