Ford’s history with electric vehicles did not begin with the Mustang Mach-E or the F-150 Lightning. In fact, the company’s first serious experiment dates back to the late 1990s, when it released an electric version of the Ford Ranger pickup. That vehicle was never intended to win over mainstream consumers. It existed largely to comply with California’s zero-emission vehicle mandates at the time, rules that forced automakers to sell a small number of battery-powered or fuel-cell vehicles or face penalties. Battery technology was primitive by modern standards. The Ranger EV relied on nickel metal hydride batteries and could barely manage 80 miles of range on a good day. Ford sold only a few thousand units before quietly discontinuing the model in 2002, once California relaxed its requirements and allowed automakers to buy regulatory credits instead.
The pattern repeated itself a decade later with the Ford Focus Electric. Introduced in 2011, the Focus Electric was overpriced, underpowered, and uncompetitive almost from day one. With just 76 miles of range and a starting price near $40,000, it cost more than twice as much as the gasoline version of the same car. Consumers ignored it. Sales never climbed beyond a few thousand units per year, and by 2018 Ford pulled the plug. At that point, it was cheaper and easier for the company to buy zero-emission credits from Tesla than to keep pouring money into electric cars that nobody wanted. For a while, it appeared Ford had made peace with the idea that EVs were not its future.
That changed in 2019, when Tesla’s Model 3 ramp made it impossible for legacy automakers to dismiss electric vehicles as a fad. The Model 3 proved that EVs could be mass-market products capable of stealing real market share from gasoline cars. Faced with that reality, Ford reversed course and decided to pursue electrification aggressively. The company reorganized its operations, created a dedicated EV division, and committed to developing electric vehicles from the ground up rather than repurposing existing gasoline platforms. The first major result of that strategy was the Mustang Mach-E, launched in late 2020.
The Mach-E was a statement vehicle. It was not a compliance car and it was not cheap. Starting at around $45,000, it was positioned as a direct competitor to Tesla’s Model Y, with modern styling, respectable range, and strong performance. It did not revolutionize the segment, but it showed that Ford could build a competent electric vehicle when it tried. Two years later, Ford doubled down with the launch of the F-150 Lightning, an all-electric version of the best-selling vehicle in America. At launch, the Lightning appeared almost too good to be true. A starting price of $40,000 undercut many rivals, and the idea of an electric pickup carried enormous symbolic weight. If Americans were going to embrace EVs, surely the F-150 would be the bridge.
On paper, Ford’s electric lineup looked credible by 2022. The Mach-E covered the crossover segment, the Lightning addressed trucks, and the E-Transit targeted commercial fleets. Ford went even further by announcing one of the most ambitious battery strategies in the industry. Through a joint venture with South Korea’s SK Innovation, branded Blue Oval SK, Ford committed more than $11 billion to build three massive battery factories in Kentucky and Tennessee. The goal was vertical integration on a scale that rivaled Tesla’s. By 2026, these plants were supposed to supply enough batteries for two million electric vehicles per year, roughly a third of Ford’s total global sales. Among the traditional “Big Three” American automakers, Ford’s plan was easily the most aggressive.
What followed instead was a slow-motion unraveling. Sales never came close to expectations. In 2023, Ford sold about 116,000 electric vehicles under its Model e division, representing barely 2.6 percent of total vehicle sales. In 2024, that number fell to roughly 105,000. Even with a modest rebound in 2025, annual EV sales remained under 200,000 units, a rounding error compared to the two-million-unit target Ford had once confidently projected. Meanwhile, losses piled up. The Model e segment lost roughly $5 billion in both 2023 and 2024, followed by another $4 billion in just the first nine months of 2025. Over three years, operating losses approached $14 billion, even before accounting for massive write-downs.
The reasons for the failure were not mysterious, but they were brutal. The F-150 Lightning, despite its early hype, was fundamentally constrained by physics and economics. It was an enormous vehicle carrying an enormous battery. Even the standard-range version packed a 98-kilowatt-hour battery, far larger than what most electric sedans or crossovers require. Battery packs are the single most expensive component of an EV, and in 2022, when lithium-ion battery costs averaged around $170 per kilowatt-hour according to Bloomberg, that battery alone likely cost Ford well over $17,000. With a starting price of $40,000, it was clear the company was losing money on every truck it sold.
Ford raised prices repeatedly, pushing the Lightning’s base price to around $55,000 by 2025, but by then the damage was done. At that price, the truck lost its value proposition. Worse, it failed at one of the core tasks pickup buyers care about most: towing. When hauling heavy loads, the Lightning’s range could collapse to as little as 80 miles, making it impractical for many real-world use cases. Public fast charging was often more expensive than gasoline on a per-mile basis, undercutting one of the main economic arguments for EVs. The extended-range Lightning improved matters somewhat, but at a price approaching $70,000, it became a niche product.
The Mustang Mach-E faced a different problem. It was not bad; it was simply unremarkable in a market that quickly became crowded. As competitors flooded the segment with similarly sized electric crossovers, Ford was forced into repeated price cuts to stay competitive. By 2025, the Mach-E’s starting price had fallen to around $38,000, erasing margins and turning what was once a premium product into a volume play with little room for profit. Average selling prices across Ford’s EV lineup collapsed, dropping from over $50,000 in 2022 to roughly $36,000 by late 2025, according to company financial disclosures.
Low sales volume compounded the problem. Ford had built capacity for roughly 600,000 EVs per year, but was selling less than a third of that. Fixed costs were spread across too few vehicles, driving unit costs sky-high. The Blue Oval SK battery plants, conceived as a masterstroke of vertical integration, became a liability instead. One Kentucky factory came online in 2025 but ran far below capacity. Two more factories remained under construction with no clear path to full utilization. Vertical integration only lowers costs if factories run at high volume. Without that volume, it becomes an expensive mistake.
The broader market environment turned hostile as well. In 2025, the Trump administration eliminated the federal $7,500 EV tax credit and began rolling back state-level EV mandates. According to Ford CEO Jim Farley, the impact was immediate and severe. “The elimination of the tax credit caused U.S. EV sales to be cut in half,” he said in an interview with CNBC. “Customers in the U.S. are really smart. We want to offer them a range of vehicles. We never saw our country being all electric or all combustion. That makes no sense.”
By late 2025, the math no longer worked. Ford announced a sweeping restructuring of its EV business that included $19.5 billion in impairments and special charges. The company wrote down $8.5 billion in Model e assets, effectively admitting that years of development work and specialized tooling were now worth far less than expected. Another $6 billion was tied to the unraveling of the Blue Oval SK joint venture. Under the revised plan, Ford would take ownership of the Kentucky battery plants and attempt to repurpose them for utility-scale energy storage, while SK Innovation would retain the Tennessee facility. Even this salvage operation came at a steep cost, as the factories required significant retooling and were never designed for stationary battery packs.
The final $5 billion in charges reflected the cancellation of multiple future EV programs, including large electric SUVs and pickups that would likely have been even more expensive and less profitable than the Lightning. Billions spent on design, supplier contracts, and tooling were written off almost overnight. When combined with operating losses, Ford’s total EV-related losses exceeded $30 billion.
Yet this was not a full retreat from electrification. Farley was careful to frame the move as a pivot rather than a surrender. “These $70,000 EVs with $30,000 batteries, that is not the future,” he said. “We think e-revs and hybrids make a lot more sense. If you’re towing a Super Duty for your job, you’re not going to want an electric vehicle. Maybe not even a hybrid.” Ford plans to continue selling the Mach-E and intends to introduce smaller, cheaper EVs later in the decade, likely priced under $40,000 and using lithium iron phosphate batteries to reduce costs.
Perhaps the most telling symbol of Ford’s recalibration is the future of the F-150 Lightning itself. The battery-electric version has effectively been discontinued, but the Lightning name will live on in a new form. In 2026, Ford plans to launch an extended-range electric vehicle variant, essentially a battery-powered truck with an onboard gasoline generator that recharges the battery. Unlike a traditional plug-in hybrid, the generator does not drive the wheels directly. Ford claims the new model will offer up to 700 miles of range on a full tank, addressing the single biggest weakness of the original Lightning while dramatically reducing battery size and cost.
In the end, Ford’s EV saga is less a story of incompetence than one of ambition colliding with hard constraints. Battery costs, vehicle size, consumer behavior, and policy shifts all played roles. Tesla succeeded by focusing on relatively efficient vehicles, tight vertical integration, and relentless cost reduction over more than a decade. Ford tried to compress that journey into a few short years while carrying the burden of legacy manufacturing, union labor, and a customer base deeply attached to trucks and SUVs. The result was a painful but perhaps necessary correction.
For now, Ford’s gasoline and hybrid businesses remain profitable, and hybrids in particular are gaining traction. Roughly 30 percent of F-150s sold are now hybrids, a figure Farley frequently highlights as evidence that partial electrification resonates more with American buyers than all-or-nothing solutions. The company has not abandoned electric vehicles, but it has abandoned the fantasy that it could transform itself overnight without consequences.
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