Why is Ford struggling in Europe?
Ford's struggles in Europe stem from a combination of a slow roll-out of electric vehicles, a shrinking demand for its traditional passenger cars, and costly operations in a highly competitive market.
In more detail, Europe’s automotive landscape has shifted rapidly toward electrified powertrains, SUVs, and more efficient models, while Ford’s European lineup has relied heavily on aging passenger-car models. That misalignment, paired with the region’s regulatory pressures, high fixed costs, and aggressive competition from rivals with stronger electrification efforts, has contributed to ongoing profitability challenges. Ford has signaled a strategic pivot under its Ford+ plan, aiming to accelerate electrification and boost profitability by strengthening its commercial-vehicle business and advancing BEVs in Europe, but the transition remains complex and costly.
Context: Europe's market dynamics and Ford’s strategic footing
The European market has undergone lasting shifts away from traditional sedans toward SUVs and zero-emission vehicles. Regulatory requirements on emissions, higher energy prices, and a fragmented regulatory environment across EU countries add cost and complexity for automakers. Ford of Europe operates with a broad footprint that includes manufacturing, research and development, and dealer networks, all of which carry substantial fixed costs. In this context, firms that lag in BEV adoption or rely too heavily on aging models can see margin pressure and slower volume growth compared with peers that moved faster to electrification and modern product lines.
Key factors behind Ford's challenges in Europe
The following observations summarize the main forces shaping Ford’s performance in the region:
- The shift in consumer demand away from traditional passenger cars toward SUVs and crossovers, coupled with Ford’s relatively aging passenger-car lineup in Europe.
- Slower electrification progress compared with competitive peers, raising questions about product cadence, battery cost, and model availability in key segments.
- Costs associated with maintaining a broad European manufacturing footprint and the need to retool plants for electrified platforms and commercial-vehicle variants.
- Intense competition from European and Asian automakers with strong electrification programs and aggressive pricing and incentives.
- Regulatory and infrastructure headwinds, including emissions targets and the European charging ecosystem, which influence consumer adoption of EVs.
- Profitability pressures from fleet sales and dealer economics, which can be more volatile in a region with strict dealer-network requirements and high service expectations.
Overall, these factors combine to create a challenging environment for Ford’s European operations, where sustained profitability has proven difficult despite global investments in electrification and commercial-vehicle strength.
What Ford is doing to turn around its European business
Ford has signaled a strategic pivot for Europe under its Ford+ plan, focusing on electrification, profitability, and a stronger emphasis on commercial vehicles. The actions below outline the key components of this approach:
- Prioritizing profitable segments by expanding the commercial-vehicle portfolio (notably the Transit family) and strengthening Ford Pro to improve margins on fleet and business customers.
- Accelerating the rollout of electric and hybrid models in Europe, with a clearer path to BEV leadership in high-potential segments and regions.
- Streamlining the European manufacturing footprint and rebalancing production toward models and variants with stronger demand and better profitability.
- Leveraging partnerships and alliances (including ongoing cooperation with major European and global partners) to share EV technology, platforms, and procurement to reduce development costs and accelerate time-to-market.
- Investing in digital sales and service channels to improve customer experience, reduce friction, and help lift retail margins in a market dominated by online and hybrid buying.
These steps reflect Ford’s attempt to translate global profitability goals into a European context, recognizing that a renewed focus on commercial vehicles and electrification is critical to achieving sustainable results in a market known for cost competition and high regulatory standards.
What to watch next in Ford’s European strategy
Observers and investors will be watching how Ford’s Europe plan unfolds over the next several years, including:
- Progress in the BEV rollout, including the availability and pricing of electric passenger cars and vans.
- The profitability trajectory of the Transit and Ford Pro business, which may determine regional margin resilience even if car volumes lag.
- Any changes to the European manufacturing footprint, including potential plant reconfigurations to align capacity with demand.
- The effectiveness of partnerships and shared platforms in driving cost reductions and speeding up time-to-market for new EVs.
Taken together, these indicators will shape whether Ford can stabilize its European business and return to sustainable profitability amid a rapidly evolving regional market.
Summary
Ford’s struggles in Europe stem from a mixture of slower electrification, an aging passenger-car lineup, fierce competition, and the high costs of maintaining a broad European footprint. The company’s response centers on a Europe-focused acceleration of BEVs, a stronger emphasis on profitable commercial-vehicle business, and structural changes aimed at reducing fixed costs and improving margins. While the path forward is clear in strategic intent, the outcomes depend on execution amid an aggressively changing European market, evolving regulatory requirements, and the pace of consumer adoption of electric vehicles.
Why is Ford having so many issues?
The higher number of recalls by Ford is most likely due to its new testing and procedures, as well as outside pressure. So far in 2025, Ford has issued recalls in 11 component categories, and not all were a result of vehicle quality testing.
Is Ford doing well in Europe?
Of particular concern is the health of Ford's passenger vehicle business in Europe, where the company has incurred significant losses in recent years, and where the industry shift to electrified vehicles and new competition has been highly disruptive.
What is the future of Ford in Europe?
We are determined to reach an important target – that 100% of our passenger vehicles will be all-electric and two-thirds of commercial vehicles to be all-electric or plug-in hybrid by 2030. A milestone on that path is our plan to sell more than 600,000 electric vehicles in Europe by 2026.
Why is Ford cutting jobs in Europe?
In announcing the job cuts on Tuesday, Ford said that European drivers were not buying as many electric cars as the company projected when it opened its Electric Vehicle Centre in Cologne just two years ago.
