$20 billion write-off. Did Ford destroy its future by “investing billions based on assumptions that vanished”?

Photo above - is this what will save Ford? The company promises to turn this tiny 3-cylinder trucklet into a hybrid by adding a battery and electric motor. But the Bronco Sport already costs $32,000 before hybridization.

Just before midnight, as 2025 ended, Ford wrote off $20 billion in losses for its cornucopia of failed EV programs. Cancelled plants, cancelled vehicles, cancelled battery production, termination of workers. Ford used an accounting entry to write off $20 billion while the whole company is only worth $50 billion (Yahoo estimate). Can a company even survive something like this? We’re about to find out.

Shares of Ford stock have NOT fallen through the floor, despite having zero earnings. It’s only down 50% from their high of $26 a share in 2022. This is probably because Ford continues to pay out a 4.7% dividend, despite having zero profits (and paying zero taxes). Don’t ask where that dividend money is coming from, or if it’s sustainable.

Ford’s CEO Jim Farley (former Toyota exec) has not been fired. He's been on the job since 2020, You probably can’t blame him for spinning a rosy prediction of endless profits fueled by Obama/Biden era EV subsidies for car buyers, new assembly lines, and public charging stations. Who WOULD’T like to get on THAT gravy train?

None of Ford’s board members have been fired either. In 2024 they added a new one – Adriana Cisnersos – an expert in “sustainability practices”. Adriana is the president of her own company (Cisneros Group), a private, family-owned business founded by her grandfather a century ago in Venezuela (It now resides in Coral Gables, Florida). Cisneros Group has several side hustles, but none apparently related to car manufacturing or EV tech.

Jim Farley is NOT the top guy at Ford. That would be William Clay Ford, Jr. The great grandson of founder Henry Ford. He probably was instrumental in green-lighting the current Jim Farley era. “Bill" Ford does have one important attribute as a kingmaker, however. He inherited 35 million shares of stock from his ancestors. That may sound like a lot, but it’s actually less than 1% of the total shares. Bill Ford has not been replaced either.

Ford Motor Company’s new survival plan is built on higher sticker prices and greater numbers of Ford 150 pickups. Which might work. This is a crazy world. Nobody is popping the hood on their Tesla at Home Depot on Saturday morning to show the cocoanut sized washing machine motor inside. And Ford will pivot to hybrids. Just put 1 KwH micro-sized lithium battery in every gasoline vehicle, and add regenerative braking. That’s also Toyota’s master plan. Toyota stock shares are now at $250 a share, up from $150. Toyota Motor Company is valued at $300 billion – 6 times as much Ford.

Will Trump era financial manipulation – tariffs on foreign made cars – succeed where EV tax rebates and outright corporate grants failed? Ford’s UAW assembly line workers and shareholders are certainly hoping so. There are going to be a LOT of unhappy people if this doesn’t work out.

I'm just sayin' . . .

Ford scraps EV flagship after biggest loss since 2009—$19.5B hit triggers 'existential threat'

$19.5B EV loss forces Ford to fire hundreds as F-150 Lightning line shuts down overnight

https://www.msn.com/en-us/autos/news/ford-scraps-ev-flagship-after-biggest-loss-since-2009-19-5b-hit-triggers-existential-threat/ss-AA1Xr0W5?ocid=msedgntp&pc=HCTS&cvid=69a7ff6874f84bb7895eac6ca8484d78&ei=23#image=11

https://www.msn.com/en-us/money/companies/19-5b-ev-loss-forces-ford-to-fire-hundreds-as-f-150-lightning-line-shuts-down-overnight/ar-AA1TrPlO

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ArishMell · 70-79, M

I could not find the first reference - MSN's presentation is such a shambles I'm surprised anyone finds anything on it!

Your second reference suggests Ford being out-competed by other EV manufacturers. Is "range anxiety" high in the USA thanks to considerable distances and uncertainty of finding chargers? (That was a significant fear in the UK, but has diminished as distances between towns and motorway service areas are modest, the number of public chargers is increasing slowly, and of course the vehicle ranges are increasing.)

The car industry was always highly-competitive, and just because a company took an early lead by being able to mass-produce relatively cheap, fairly reliable cars doesn't necessarily mean it can hold that lead a hundred years later. Especially now that the automotive industry is far more international that it was, and like all major industries far more under the thumbs of remote money-traders.

I examined the specifications of that 'Bronco'

Your heading photograph suggests it is hardly "tiny" - perhaps similar size to the Rangerover, Toyota Hilux or Ford Ranger, but like the Rangerover is a big estate-car rather than builder's or farmer's pick-up. Perhaps a bit lighter at just under a tonne and a half. It is based partly on the Ford Maverick so not entirely all-new.

Only two litres in just three cylinders? That shows how much engine design has advanced in the last few decades.

Both turbocharged, even the 1.5l "L" is still rated at just over 180HP, the 2l at 240HP.

Not to be sniffed at unless the car is so over-heavy it seriously drags its efficiency down. I don't suppose those lumbering V8 engines of the 1950s were any more powerful, and were certainly far thirstier - but they were in very heavy cars with automatic transmissions then of poor efficiency. An engine being so big its owner can brag about its bulk in a supermarket car-park doesn't make it any better!

hippyjoe1955 · 70-79, M

@ArishMell The longevity of a car is in part how fast the engine turns over. Back in the day a 3500 RPM was highway driving. My truck's engine runs at 1500 RPM at highway speed without labouring. The life expectancy of the engine should be twice the mileage of the older cars.

ArishMell · 70-79, M

@hippyjoe1955 Good point. I think it's generally the deterioration of the bodywork rather than the engine that is the limit for a car's life; but commercial-vehicle engines do seem to have the greater longevity.

I suppose the car makers don't worry about quarter-million engine mileages if the car itself is not designed to last much more than 150 000; but also there's the matter of performance, with cars intended to give nippy acceleration and high cruising speeds.

I think my friend's 1-tonne Vauxhall Vivaro van's Diesel engine runs at not much above 2000rpm at 60-70mph. My Renault Kangoo's has to spin at 4000rpm at 70mph - and it is starting to struggle at that.

hippyjoe1955 · 70-79, M

@ArishMell I did a fun experiment one day when I started from zero and did my best to keep the RPM no higher than 1500. In a few miles I was doing 65 MPH.

ArishMell · 70-79, M

@hippyjoe1955 That's quite impressive!

Reminds me a bit of a journey some friends and I made many years ago,. a return-trip of some 650 miles with some more running about around the destination.

Our transport was a Series One Landrover, petrol, that managed about 25mpg if you were not too leaden-footed. Others dropped out leaving just three, so we sat down and calculated if we could afford the shared fuel cost. Yes if we kept the speed to 45mph, on a motorway with a 70mph speed-limit.

All three of us could drive it so we took it in turns, swapping at service-stations. With the stops as well, it took us about twelve hours. Those early Landrovers were not exactly built for comfort either.

Just to add to the fun the steering was a bit worn so the car tended to drift down the road's camber, needing a little course correction every couple of hundred yards.

hippyjoe1955 · 70-79, M

@ArishMell Yes vehicle driving characteristics do vary. I drove 6 hours one way on glare ice using my uncle's 67 Chevelle on Biased ply tires. Those cars had a very strange habit of pulling one way then suddenly and without warning jump and pull the other. So you would steer countering the car's pull to the left when suddenly it would switch and pull to the right. It had no clearly defined pattern in switching so I had to be on alert all the time. We made it one way and then had to drive back that night. After a couple of hours I had to clean the headlights as they were covered with road slop. I stepped out of the car and promptly slid down tho road. There was a very fine layer of water on the ice. After about 10 hours of driving I turned to my uncles, there were 5 of them in the car with me and asked if one of them would take over for a bit. They all told me that I was doing a fine job and that I should carry on. I heard on the radio the next day about a fatality on the road we drove down. A young lady lost control on the ice and was killed. I still hate Chevelles. lol

ArishMell · 70-79, M

@hippyjoe1955 Strange - must have been a design weakness, probably in the steering geometry. Was it ever corrected?

A friend has a Honda hybrid. She says it is fine normally but has a "safety" feature she does not like one bit - a side-alert system that steers the car away if it "thinks" it is dangerously close to the obstruction. Trouble is, it automatically grabs the steering without warning. It can make it hard to pull in to pass an approaching vehicle in a very narrow road, or steer round something in the road like a pothole or a stray rock.

I asked if you can turn it off. She said yes, but at the start of every trip, not continously. It re-sets itself when you park the car.

I've have had to use industrial hand-cleaners on the windscreen as well as lamps in poor conditions, when the greasy muck was too much for the normal screen-washer.

SusanInFlorida · 31-35, F

@ArishMell anything with a 3 cylinder engine is tiny. ask your neighbors and co-workers.

if you buy an EV but NOT a home charging station, you are consigned to paying 3X as much to recharge compared to what residential rates are. Range anxiety gives way to wallet anxiety.

ArishMell · 70-79, M

@SusanInFlorida They would not see it as tiny. They'd more likely agree with me that a car engine developing nearly 200HP from 2 litres in 3-cylinders is impressive.

It's impressive because it shows how design has progressed. Mere physical size alone is not a true indicator of power. Those enormous V8 and similar engines of 1950s and 60s are obsolete for most vehicles because although they look impressive, they are far less efficient than modern engines. And take a lot of room in the bodywork.

No-one I know would sneer at a car with that Ford Bronco performance, even those who drive hefty vans or pick-ups with 2 or 2.5litre, 4-cyl engines. We buy cars for how they support our lives, not for bragging about physical engine size.

There is a lot of vanity-flattering in the advertising, but modern cars are designed to be as effective, efficient and economical as possible. Really, this evolved from the start, otherwise we'd still be pottering around at 30mph in 1920s' Ford Model Ts, or the 1930s' lumps just about reaching 60mph with enormous in-line engines slurping fuel at <20mpg.

We cannot realistically compare each other's EV running costs because we live in different countries.

I don't know how EV electricity is costed in the UK, though I suspect it's cheaper if you can charge the car at home rather than by a public charger. An EV owner told me that if you have a proper, high-rate charger installed it must have its own consumption meter, separately from the meter feeding all the rest of the home. I don't know but imagine it is so in future the car electricity can be taxed to compensate for the diminishing Duty and VAT revenue from diminishing petrol and Diesel fuel sales.

If you can charge it at home... Somewhere from a third to a half of we UK motorists (including me) can not because we have no private parking-space adjacent to the house. In my own street of around 80, terraced homes only about 4 have room on their own land for off-street parking.

Comparing the overall economics of an EV with an equivalent, modern, i.c.-car is complicated, and as I will almost certainly never own an electric one I have not investigated it in detail.

hippyjoe1955 · 70-79, M

@ArishMell My wife remembers as a young girl how they would plan a drive of 150 miles. Her dad would check all the fluids and tire pressure and fuel up. They would drive 75 miles have lunch and then drive the last 75 miles to get to her grandparents place before supper. They would spend the night and then repeat the process back home again. A month ago I jumped in my truck drove straight through the same 150 miles did what needed to be done and drove back in time for supper. The old cars with the leaky engines and transmissions and biased ply tires with loose steering made the 150 mile trip exhausting. Now it feels like I am watching TV as the scenery passes by.

SusanInFlorida · 31-35, F

@ArishMell i have yet to see an EV review where it's range even came close to the "government estimates" in any country.

Yesterday I saw a motor trend article on the Chevy blazer EV. 325 advertised range. Max achieved in the real world, over a 1 year extended test? 275 . . .

ArishMell · 70-79, M

@SusanInFlorida I take the performance figures for any vehicle with a pinch of salt, because they are in controlled conditions!

So I would think a maximum real range of about 0.8 that claimed, optimistic but more credible than the test figure.

It's not too bad: Car & Driver says the EPA rating for the same is 283-312 miles; fairer than the advertisement's 325. It looks quite a large, heavy vehicle, and anything over 250 miles is probably quite good for anything of that class.

Nevertheless, EVs are improving, but I can understand why they might not be attractive in a country of continent-size, and where you could probably drive a comparable Diesel-engined car for 500 miles on a single tank-full. (Whether more cheaply, I don't know.) That car's petrol version - maybe 400 miles.

Convenience comes into it too of course: I imagine you could queue for a quite a while at a charging-point at busy times.

SusanInFlorida · 31-35, F

@ArishMell if anyone's plan is to ONLY recharge their EV at a public network charger (at 3X the residential energy rate) they need to stop and think about that.

ArishMell · 70-79, M

@SusanInFlorida Quite so. That means really, owning an EV only if you ever drive within a radius of about 100 miles from home, and can recharge it there.

Those of us who cannot do that (I suppose in the US, most would be residents of urban flats) are in exactly that position.