Ford Motor Company (NYSE:F) is pivoting away from electric vehicles (EVs) and at least one analyst is praising the move.
The Analyst: RBC Capital Markets analyst Tom Narayan maintained a Sector Perform rating on Ford, with a $12 price target.
The Analyst Takeaways: Due to lower-than-expected EV demand, Ford is restructuring its strategy, Narayan said in a new investor note.
Read Also: Ford Motor Reports Better-Than-Expected Q3 Earnings: What To Know
Among the coming changes:
- Exiting the BlueOval SK joint venture
- Assuming ownership of two EV battery plants in Kentucky
- Cancelling three planned EV models and
- Ending production of the F-150 Lightning.
The company is also set to expand hybrid offerings and “shift its EV focus to a flexible, affordable Universal EV Platform, targeting 50% hybrid, extended range EV, and electric sales by 2030," Narayan said.
Narayan expects Ford will likely have a pre-tax asset writedown of $8.5 billion in Q4, a total $19.5 billion impact on EBIT and $5.5 billion impact on cash.
"Notably, Ford now anticipates Model E segment profitability by '29, with improvements to the segment beginning in '26."
Ford management raised its 2025 adjusted EBIT guidance to around $7 billion, up from $6.25 billion prior.
The analyst said the pivot comes after the Model E segment had a loss of $.14 billion in the third quarter and a loss of $1.3 billion in the second quarter. The analyst estimated EV losses of $4.9 billion for 2025 previously.
"We believe this strategic adjustment is a rational response to the slowing EV market, particularly in the context of the current regulatory landscape and the removal of the $7,500 EV tax credit last September."
The analyst said Model E reaching breakeven by fiscal 2029 could provide a $4.9 billion boost to the company's EBIT. This would help offset the $5.5 billion in net debt in fiscal 2026.
"We caution that the Ford's impairment is larger than GM's by a factor of 12, and retooling manufacturing plants towards ICE and hybrid vehicles could be a lengthy process given the scale of the Model E segment."
F Price Action: Ford stock closed up slightly to $13.67 on Tuesday, with shares hitting a new 52-week high of $13.99 during the trading session. Ford shares are up 41.7% year-to-date in 2025.
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