Why is Ford losing money on Mach-E?

The Mach-E has not yet delivered profits for Ford; its losses stem from big upfront investments, high battery and component costs, and pricing dynamics in a competitive EV market. Ford expects profitability to arrive as sales grow, costs come down through scale, and software-enabled features generate additional value.

Context: Mach-E and Ford’s broader EV push

Launched in 2020, the Mach-E is Ford’s flagship mass-market electric crossover and a centerpiece of the company’s plan to electrify its lineup. It competes in a crowded field with Tesla and other automakers, while Ford negotiates the transition from traditional internal combustion engine (ICE) margins to higher-cost, software-driven EV margins. The vehicle is part of Ford’s broader shift toward electrification, which also includes the F-150 Lightning and commercial EV programs. The financial math for the Mach-E hinges on reaching high volumes, lowering per-unit costs, and capturing recurring software and connected services revenue over time.

Why the Mach-E’s profitability has lagged

Several structural factors converge to keep the Mach-E from delivering conventional automotive margins today. The following factors explain why the model has carried losses rather than profits so far.

• Upfront investments in new EV platforms and software: Ford has spent heavily on electrification architecture, manufacturing tooling, and the software stack that runs the Mach-E, and these capital outlays are amortized over modest early production volumes.


• Battery and component costs: The lithium-ion battery pack is a large share of the vehicle’s cost, and raw-material price volatility—along with supply constraints—has kept unit costs elevated during ramp-up and early production cycles.


• Pricing pressure and incentives: To compete with Tesla and other entrants, Ford has needed to price aggressively at times and offer incentives to sustain demand, compressing margins on certain trims and configurations.


• Ramping production and underutilized fixed costs: Early production ramps carry higher per-unit fixed-cost allocations as factories scale up, affecting early profitability even as volumes rise.


• Software and connectivity investment: Ongoing development, over-the-air updates, and data-driven services require sustained investment, which pressure short-term margins even as the technology matures.


• Product mix and market dynamics: The Mach-E’s mix of trims and options, plus international pricing and logistics, influence average margin per unit and complicate a simple profitability trajectory.

Taken together, these factors have kept Mach-E margins below Ford’s broader profitability targets. Ford has signaled that profitability on the Mach-E is a function of scale, cost reductions, and monetization of software and services over time.

What Ford is doing to move Mach-E toward profitability

Ford argues that profitability will improve as production scales, costs descend, and the company leverages its software strategy. The steps below outline where Ford is focusing its efforts to tilt the Mach-E toward positive margins.

• Driving volume to dilute fixed costs: Expanding production and geographic reach to spread fixed manufacturing and development costs over a larger number of units.


• Cost reductions through scale and supplier leverage: Pursuing better material and supplier terms, while standardizing parts across models to reduce complexity and unit costs.


• Pricing optimization and product mix: Aligning pricing with value, promoting higher-margin configurations, and adjusting incentives to protect gross margins.


• Software monetization and services: Expanding connected services, subscriptions, and data-driven features that create recurring revenue beyond the vehicle sale.


• Focused capital discipline and timing: Managing investment pace in EV platforms and software, aligning spending with ramped-up production and demand.

As Ford continues to scale its EV ecosystem and refine its manufacturing and software capabilities, the Mach-E’s profitability profile is expected to improve, though the timeline depends on external factors such as battery pricing, supply-chain stability, and consumer demand.

Summary

The Mach-E’s current lack of profitability is rooted in large upfront investments, high battery and component costs, and market-driven pricing pressures during a ramp-up phase. Ford remains confident that as volumes rise, costs fall, and software-enabled services mature, the Mach-E will contribute meaningfully to margins within its broader EV strategy. The company continues to pursue cost discipline, scale advantages, and monetization opportunities to transform the Mach-E from a cost center into a profitable element of Ford’s electrified lineup.

What are the common problems with Mach-E?

Premature pad/rotor wear, pulsation or vibration, antilock system, parking brake, master cylinder, calipers, squeaking, brake failure, regenerative braking.

Why do Mach-E lose so much value?

The first reason why the Mach-E loses so much of its value after only five years is simply because it's an electric vehicle. As a general rule, EVs suffer from depreciation much more than gas or even hybrid cars do, so the Mach-E may seem doomed to depreciate from the get-go.

Why is Ford discontinuing the Mach-E?

The Ford Mustang Mach-E isn't selling well due to a combination of issues, including a recent stop-sale order caused by a software defect that can trap occupants, previous recalls for safety-related problems, and broader market factors like intense competition and a high price point. While Ford has tried to boost sales with discounts, the vehicle still faces slow sales compared to its competitors and the industry average, notes CarBuzz.
 
Immediate and recent issues

• Stop-sale order: In June 2025, Ford halted sales of the Mach-E because a software defect could cause the doors to malfunction, potentially trapping occupants inside or outside the vehicle. 
• Recalls: The Mach-E has been the subject of multiple recalls for various issues, including a potential for the vehicle to not start or lose power, improper seat belt attachments, and loose subframe bolts. 

Broader market factors

• Competition: The Mach-E faces stiff competition, particularly from the Tesla Model Y, which is often seen as a more affordable and popular alternative. 
• Pricing: The Mach-E's higher price point, even with discounts, makes it a harder sell than some competitors. 
• Depreciation: EVs, in general, tend to depreciate faster than internal combustion engine vehicles, which can deter potential buyers. 
• Market slowdown: The entire new car market has experienced a slowdown, with even the Mach-E's slower-than-average sales pace contributing to dealer inventory challenges. 

Why is Ford losing money on EVs?

Ford is losing money on EVs due to high upfront costs for new factories and technology, industry-wide price competition, and challenges with large, less-profitable models like the F-150 Lightning. The company is also dealing with a shift in its strategy away from some large EV platforms, while continuing to invest in battery development.
 
High costs and investments 

• Upfront capital: Billions in losses reflect heavy investments in new EV-specific factories, equipment, and research and development for next-generation models.
• Manufacturing: The cost of building new EV production lines is substantial, and this investment is spread across the vehicles sold, increasing the cost per vehicle in the short term. 

Market and strategy challenges

• Price pressure: Industry-wide pricing competition and lower sales volumes have reduced revenue and profitability for the EV division. 
• Unprofitability of large EVs: Building large, high-demand EVs like the F-150 Lightning is proving difficult to make profitable, as they are more expensive to build and customers are often unwilling to pay the premium required. 
• Strategic shift: Ford is rethinking its EV strategy, delaying some large models and focusing more on smaller, more affordable EVs, plug-in hybrids, and hybrids to become more competitive. 

Other factors

• Tariffs: Proposed tariffs on imported EV components could further increase costs for Ford. 
• Dealer inventory: A high number of unsold EVs, such as the Mustang Mach-E and F-150 Lightning, sitting on dealer lots are a symptom of lower-than-expected demand and contribute to losses.