Why is Ford stock struggling?

Ford stock has struggled due to a mix of macro headwinds, the costly push into electrification, and the challenge of turning heavy upfront EV investment into durable profits. In the near term, higher financing costs, competition in electrification, and execution risk of its software and battery initiatives weigh on investor sentiment.

To understand the question in depth, it helps to unpack the external environment, Ford's strategic bets on BEV and software, and the company’s execution across regions. This article outlines the main drivers behind the stock’s recent underperformance and what could shift the outlook going forward.

Macro headwinds weighing on Ford

The following factors capture the broad economic and policy backdrop that has pressed Ford’s stock performance in recent quarters:

• Higher interest rates and tighter financing conditions that reduce new-vehicle affordability and slow demand for big-ticket purchases like trucks and EVs.


• Persistent inflation and rising costs for materials and labor that squeeze margins on both legacy ICE vehicles and new BEV programs.


• Regional demand shifts, with slower auto markets in Europe and a mixed recovery pace in China, impacting global volume and mix.


• Currency fluctuations that can compress reported earnings when Ford translates international results into dollars.


• Regulatory and policy dynamics around EV incentives, including credits tied to battery content and North American assembly, which affect demand signals and profitability outlook.

Taken together, these macro headwinds create a challenging backdrop for Ford’s earnings trajectory in the near term, complicating the path to a stable, higher-margin earnings mix.

Ford’s EV strategy and profitability trajectory

Ford’s aggressive shift toward electrification and software is a double-edged sword: it promises future growth but requires heavy investment and carries execution risk as the company scales BEVs and related services.

Before examining the details, the following points summarize how the EV push intersects with profitability and investor sentiment:

• Significant upfront capital expenditure to accelerate BEV development, battery sourcing, and software capabilities, which can pressure near-term margins even as the company targets longer-run benefits.


• Battery strategy and procurement challenges, including how Ford sources cells, manages costs, and achieves scale to drive BEV gross margins higher over time.


• Software, connectivity, and services as a potential new margin lever, but with a long path to meaningful, recurring revenue and steady profitability.


• Ramp risks in BEV production and the need to balance legacy ICE profitability with the costs of transition, including plant utilization and supplier reliability.

These factors mean Ford’s stock often trades on expectations for how quickly and efficiently the company can convert BEV investments into durable profits, while still sustaining profits from its traditional, high-margin trucks and SUVs.

Battery strategy and partnerships

Ford’s BEV ambitions rely on a mix of in-house development and external battery supply. The key issue for investors is whether Ford can secure affordable, scalable battery capacity to support a growing BEV lineup while keeping costs in line with expectations. Details to watch include joint ventures, supplier arrangements, and the ability to weather potential disruptions in battery supply or raw-material costs.

• Battery-cell sourcing strategy and any partnerships that secure scale and cost advantages.


• Vertical integration opportunities versus reliance on suppliers, with implications for timing and margins.

In the near term, battery sourcing remains a critical variable for Ford’s profitability story and a driver of share-price volatility as investors weigh execution risk against long-term value creation.

Software and services push

Ford aims to monetize connectivity, telematics, and other software-enabled features as part of a broader reinvention of the vehicle as a platform. The challenge is translating these capabilities into reliable, recurring revenue while maintaining competitive pricing and customer satisfaction.

• Progress in developing a robust software stack and ecosystem around Ford vehicles.


• Potential revenue streams from subscriptions or services and how quickly they contribute to margin expansion.

The software and services trajectory adds optionality to Ford’s overall financial picture, but investors will closely watch adoption rates and the impact on margins over multiple quarters.

Regional performance and product mix

Regional dynamics and product mix are a major driver of profitability and stock performance. Ford’s strengths and weaknesses vary by market, influencing outlook and valuation.

• North America remains a strong profitability pillar thanks to high-demand pickup trucks and SUVs, though this depends on pricing discipline and competitive dynamics in a crowded market.


• Europe and Asia present more mixed results, with slower BEV uptake or higher regulatory costs in some regions, impacting overall margins and growth expectations.


• Fleet versus retail mix and the timing of wholesale vehicle incentives can affect quarterly results and the perceived quality of earnings.

Taken together, regional performance influences the stock’s multiple and the perceived risk around Ford’s ability to sustain a balanced, profitable mix during the transition to EVs and software platforms.

What could shift the outlook for Ford stock

The following potential catalysts could alter the trajectory of Ford’s stock by improving profitability, accelerating BEV scale, or reducing execution risk:

• Faster-than-expected BEV adoption in core markets with improving gross margins as scale increases.


• Successful cost reductions and capacity optimization that improve return on invested capital and overall margins.


• Favorable policy developments or EV credits that support demand and reduce the impact of high upfront BEV costs.


• Strength in high-demand, high-margin trucks and SUVs that sustains cash flow while BEV investments mature.


• Strategic partnerships or manufacturing efficiencies that de-risk battery supply and software development costs.

Investors will be watching Ford’s quarterly results and strategic updates closely for signs that the company can deliver durable profitability while executing its BEV transformation and software strategy.

Summary

Ford stock has faced headwinds from macro economic factors, the capital-intensive shift to electrification, and the challenge of turning BEV investments into steady profits without sacrificing cash flow from its core ICE vehicles. The company’s future hinges on its ability to secure affordable battery supply, scale BEV production, monetize software and services, and maintain margin discipline across regions. If Ford can demonstrate meaningful BEV margin improvement, cost efficiency, and resilient demand for its traditional lineup, the stock could regain momentum as the transition matures. Until then, investors will weigh the trade-offs between near-term profitability and long-term growth in electrification and software.

Is Ford stock expected to go up?

Analyst opinions on Ford's stock outlook are mixed, with a consensus "Hold" rating and an average price target that suggests a slight decrease over the next year, though some short-term forecasts are more positive. Some analysts are optimistic about the long-term, citing potential rebounds driven by the company's EV strategy and improving financial stability, with a projected rise to over $20$ 20$20 by 2026. Other analysts remain cautious, citing concerns about the profitability of the EV business and calling for stronger earnings growth and margins. 
Short-term outlook

• Mixed predictions: Opinions are divided on the short-term. One forecast suggests a short-term rise of nearly 15%15 %15% in the next three months, while others see a potential slight downside based on the average analyst price target of around $11.75$ 11.75$11.75.
• Analyst consensus: The consensus among 12 analysts is a "Hold" rating, with an average price target of $11.75$ 11.75$11.75, representing about an 8.91%8.91 %8.91% decrease from the last price. 

Long-term outlook

• Potential for rebound: Some analysts are optimistic for the long term, projecting a significant rebound by 2026 based on the expanding EV lineup and improving financials. 
• EV strategy: The success of Ford's electric vehicle strategy is a key factor. While some see it as a driver for future growth, others are concerned it may put further pressure on margins. 

Risks and concerns

• EV profitability: There are concerns that the new EV business is not yet profitable and may continue to put pressure on the company's bottom line in the near to medium term. 
• Analyst caution: Despite some positive indicators, many analysts remain cautious due to uncertainty surrounding earnings growth and margins. 
• Dividend as a cushion: For income-focused investors, the stock's dividend yield (around 4.65%4.65 %4.65%) may be a more reliable benefit, although some argue that government bonds offer less risk for similar yields. 

Will Ford stock ever hit $100?

For Ford stock to hit $100, it would require a market cap nearly 3x its current size. This could happen only through a combination of massive EV adoption, high-margin software revenue, and strategic transformation. While possible, most models do not forecast such growth by 2030.

Why is Ford stock falling?

Ford's stock is falling due to several factors, including a lowered profit outlook for 2025 caused by a fire at a key aluminum supplier, ongoing high costs from the UAW contract and warranty repairs, and poor performance in its electric vehicle division. Analyst downgrades and warnings about inventory backlogs also contributed to the downward pressure on the stock. 
Production and supply chain issues 

• A fire at an aluminum supplier's plant in New York is disrupting the supply of a critical component for Ford's best-selling F-Series trucks, leading to production concerns and a lowered profit forecast for 2025.
• The plant is not expected to fully restart operations until the first quarter of 2026, potentially causing significant and prolonged production disruptions. 

Costs and financial performance

• The new contract with the United Auto Workers (UAW) is expected to add significant costs to each vehicle produced, further straining profitability. 
• Warranty costs have been a recurring issue, with a large jump in the second quarter of 2024 impacting earnings, and analysts point to this as a persistent problem. 
• Ford's electric vehicle (EV) division, Model e, has been a significant drain, losing over $1 billion in the third quarter of 2025 and expected to continue to lose money in 2025. 

Analyst sentiment and inventory

• Several analysts have downgraded the stock or lowered their price targets, citing concerns about inventory backlogs and a widening gap between warranty provisions and actual cash outflows. 
• The company faces challenges with growing inventory, which can lead to price pressures and reduced profitability. 

Is Ford going to recover?

Looking ahead, Ford believes it can recover at least half of those fourth-quarter losses in 2026, thanks to a more favorable US regulatory environment and cooling warranty costs. Analysts see potential for EBIT to reach $10.5 billion in 2026, fueling BofA's buy rating and a higher price target.