VALUATION HIGHLIGHTS

1. Ford Pro constitutes 35% of the Trefis price estimate for Ford's stock.
2. Vehicle Lease & Loans constitute 32% of the Trefis price estimate for Ford's stock.
3. Ford Blue constitutes 19% of the Trefis price estimate for Ford's stock.

WHAT HAS CHANGED?

Latest Earnings: Q4 and Full Year 2025

Ford reported Q4 2025 revenue of $45.9 billion, a 5% decrease year-over-year, while full-year revenue reached a record $187.3 billion. The company posted a significant Q4 net loss of $11.1 billion and a full-year net loss of $8.2 billion, primarily driven by $10.7 billion in non-cash impairments related to the Model e EV segment and program cancellations. Despite the GAAP loss, full-year adjusted EBIT stood at $6.8 billion. Performance was bolstered by the Ford Pro commercial segment, which achieved record volume for Transit vans, while the Ford Blue segment maintained flat revenue of $101 billion despite a decline in wholesale units.

Note: Ford's FY'25 ended on December 31, 2025.

Strategic Pivot to Hybrids and Energy Storage

In late 2025, Ford announced a massive strategic realignment, deprioritizing certain large pure-electric SUVs in favor of a broader hybrid lineup and a new "Universal EV Platform" for affordable small vehicles. A major component of this shift is the entry into the battery energy storage market; Ford is repurposing its Kentucky battery plant to produce systems for data centers and grid infrastructure, targeting 20 gigawatt-hours of capacity by 2027. This move aims to leverage underutilized EV battery capacity to create a high-margin, anti-cyclical revenue stream.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Ford's value that present opportunities for upside or downside to the current Trefis price estimate for Ford:

Ford Blue

• Ford Blue Volumes: Sales of Ford Blue vehicles rose from around 2.83 million in 2022 to 2.9 million in 2023 and remained roughly flat in 2024. Trefis expects the metric to grow to about 3.04 million by 2031. However, if volumes rise to over 3.6 million, our price estimate could have a 10% plus upside.

Ford Pro

• Ford Pro Gross Margin: Ford Pro remains the company's strongest profit engine, delivering $6.8 billion in EBIT for 2025 with double-digit margins. Paid software subscriptions grew 30% year-over-year, suggesting a shift toward higher-margin recurring revenue. If software adoption continues at this pace, there is significant upside to the segment's long-term margin profile.

For additional details, select a driver above or a division from the interactive Trefis split for Ford at the top of the page.

BUSINESS SUMMARY

Ford operates through three distinct, customer-centric business segments: Ford Blue (traditional ICE and hybrid vehicles), Ford Pro (commercial vehicles and services), and Ford Model e (electric vehicles and digital platforms). The company's "Ford+" plan focuses on leveraging its dominant position in trucks and commercial fleets to fund a long-term transition to a software-defined, electrified future.

SOURCES OF VALUE

Ford Pro is currently the most valuable component of the business due to its high margins and dominant market position in the commercial sector.

Commercial Market Leadership

Ford Pro's dominance in the North American and European commercial vehicle markets provides a stable, high-margin revenue base. The Super Duty and Transit franchises act as a moat, with fleet customers increasingly tied to Ford's ecosystem through integrated telematics and service software.

Iconic Internal Combustion Franchise

The Ford Blue segment, anchored by the F-Series—America’s best-selling truck for nearly half a century—generates the massive cash flow required to fund the company's electric and digital transformation. This "engine" remains resilient through a strategic shift toward hybrid powertrains, which now lead the U.S. hybrid truck market.

KEY TRENDS

Hybrid Resurgence

As pure EV demand growth slowed in 2025, Ford pivoted heavily toward hybrid technology. The company is integrating hybrid or "extended-range" electric options across its entire portfolio, recognizing that consumers prefer the flexibility of dual power sources while charging infrastructure continues to mature.

Industrial Cost Reduction

Ford is aggressively targeting $1 billion in annual industrial cost improvements to offset inflationary pressures and "warranty" costs that have historically plagued its margins. This includes a revamped battery-sourcing strategy designed to maximize benefits from the Inflation Reduction Act (IRA).

Digital and Software Services

A major trend for Ford is the monetization of the "vehicle after-purchase" through software. With 30% growth in paid subscriptions in 2025, Ford is attempting to transition from a traditional hardware manufacturer to a services-oriented company, aiming for a more resilient and predictable profit profile.