Ford Motor Company: A Long-Term EV Play Amid Near-Term Headwinds

The electric vehicle (EV) revolution has reshaped the automotive industry, with legacy automakers like Ford Motor Company (F) racing to keep pace with Tesla and upstart competitors. But is Ford positioned to become a top EV stock in 2025, or is it lagging behind rivals? The answer lies in parsing its recent performance, strategic bets, and the risks clouding its path.

Ford’s Q1 2025 EV sales grew 11.5% year-over-year, but this modest expansion contrasts sharply with General Motors’ (GM) 50% surge, which propelled GM to over 30,000 EV sales in the quarter—overtaking Ford. While Tesla’s U.S. market share dipped to 42.6% from its 2022 peak of 62%, Ford claimed just 7.5% of the EV market in Q1 2025. This lag raises questions about Ford’s ability to capitalize on the shifting demand.

Sales Growth vs. Market Realities
Ford’s EV sales of approximately 22,500 units in Q1 2025 (up from 20,223 in Q1 2024) pale against GM’s gains and Tesla’s dominance. The broader U.S. EV market grew only 10.6% year-over-year, suggesting saturation in some segments. Ford’s challenge is clear: its growth rate is below both the market and its rivals. Yet its strategic focus on high-margin vehicles like the F-150 Lightning and Mustang Mach-E offers promise. These models align with consumer preferences for trucks and SUVs, where EV adoption is accelerating.

Financial Strains and Analyst Caution
Analysts are divided. Wells Fargo downgraded Ford to “Underweight,” citing tariffs and supply chain bottlenecks, while Citigroup maintained a “Buy” rating, betting on Ford’s $50 billion EV investment through 2026. The consensus leans toward “Hold,” with an average price target of $9.97—far below Ford’s recent $10.50 share price.

The numbers underscore the near-term risks. Ford’s 2025 EPS estimate has been slashed to $1.14, down 17% from earlier projections, while Q1 2025 EPS is now expected to be just $0.01. Revenue is projected to fall 2.62% year-over-year, driven by declining internal combustion engine (ICE) sales. Trade tariffs—particularly the 25% U.S. levy on non-NAFTA-compliant vehicles—have forced Ford to retool production, adding costs and delays.

The Strategic Gamble
Ford’s future hinges on execution. Its $50 billion EV investment targets 2 million annual EV sales by 2026—a goal that demands flawless supply chains, tariff compliance, and a product lineup that outpaces competitors. The F-150 Lightning, for instance, has carved a niche in the pickup market, but GM’s Hummer EV and Tesla’s Cybertruck are also vying for that segment. Meanwhile, rising competition from Hyundai/Kia and Honda—whose Prologue SUV contributed significantly to Honda’s EV gains—leaves Ford with little room for error.

The Bottom Line
Ford’s stock trades at a P/E ratio of 6.51, suggesting the market discounts its near-term struggles. However, its long-term EV strategy could pay off if it navigates supply chain hurdles and tariffs. The stock’s valuation offers a margin of safety, but investors must weigh the risks:

• Strengths:
• Strong brand equity in trucks/SUVs, a critical EV segment.
• Ambitious capital allocation toward EVs.

• Undervalued relative to peers.

• Weaknesses:

• Slower sales growth than rivals.
• Tariff-driven production delays.
• Negative near-term EPS and revenue trends.

Conclusion
Ford Motor Company is not yet a top-tier EV stock in 2025, but its potential as a long-term play remains compelling. With a market share of just 7.5% against Tesla’s 42.6%, Ford must accelerate growth to avoid being left behind. Its $50 billion EV investment and focus on trucks—where EV demand is strongest—provide a roadmap, but execution risks loom large.

For investors, Ford’s stock offers a high-risk, high-reward proposition. The near-term financial and operational hurdles suggest caution, but those willing to bet on its turnaround and EV leadership could be rewarded. At current prices, Ford is a speculative bet on a company transitioning from a legacy automaker to a 21st-century EV powerhouse—a journey that’s far from complete.