Ford Motor Co. Reports Decline in February 2025 U.S. Auto Sales

Ford Motor (F) experienced an 8.9% decrease in U.S. auto sales for February 2025, highlighting the ongoing difficulties the company faces amid shifting consumer interests, adjustments in production, and rising competition.

Sales Distribution and Challenges

While sales of Ford’s electrified models, which include hybrids and electric vehicles (EVs), grew by double digits, sales of its core gasoline-powered vehicles—still the majority of its offerings—fell by 12.7%. The company attributes this decline, in part, to product transitions, such as the discontinuation of the Edge crossover and production pauses at key facilities, including the Kentucky Truck Assembly plant. This plant is currently preparing for next-generation models like the Ford Expedition and Lincoln Navigator.

In terms of EV sales, Ford saw a 15% increase to 7,326 units, driven by strong demand for the Mustang Mach-E and E-Transit van. However, sales of the F-150 Lightning dropped 14.7%, as competition increases from vehicles like the Tesla Cybertruck and Chevy Silverado EV.

Meanwhile, SUV sales plunged by 24.4%, and car sales were down by 32.2%. Conversely, truck sales increased by 7.7%, demonstrating a mixed performance across Ford’s various segments.

Stock Performance and Forecast

Over the past year, Ford’s stock has declined by 24.9%. This contrasts sharply with the Zacks Auto, Tires and Trucks sector, which fell by only 2.7%, and the Zacks Automotive – Domestic industry, which saw an increase of 11.2%. In comparison, the S&P 500 index rose by 16.2% during the same period.

Despite efforts to streamline inventory and promote EV adoption through incentives, Ford continues to face multiple headwinds as it adjusts to evolving market dynamics, including heightened electrification and an uncertain economic environment.

Impact of Tariffs and Market Competition

In addition to the already slow auto sector, Ford faces challenges from the Trump administration’s recent 25% tariff on auto imports from Mexico, Canada, and the European Union. Given Ford’s manufacturing sites in Mexico, including a Chihuahua engine plant and two assembly facilities in Cautitlan and Hermosillo, these tariffs could disrupt the company’s operations significantly. Ford exported nearly 196,000 vehicles from Mexico to North America in the first half of 2024, with around 90% directed to the United States.

Ford also has plans for a gas-powered F-Series pickup truck at its assembly plant in Oakville, Canada, set to begin production in 2026. The company is evaluating its strategic approach as the full impact of the tariffs unfolds.

In the EV sector, Ford is contending with increasing pricing pressure and competition. Automakers, including Chinese brands like BYD and Li Auto, are offering lower-cost alternatives, which is putting additional stress on Ford’s pricing strategies.

Consumer preferences are shifting, and while Ford’s hybrid trucks have gained traction, the EV segment struggles to establish profitability due to high battery costs and limited consumer willingness to pay a premium for electric options.

Revenue Projections for 2025

Looking ahead, Ford anticipates adjusted EBIT for 2025 to be between $7 billion and $8.5 billion, a decline from $10.2 billion in 2024. Additionally, the company expects to generate between $3.5 billion and $4.5 billion in adjusted free cash flow, down from $6.7 billion in the previous year. Capital expenditures are projected to range from $8 billion to $9 billion.

The Zacks Consensus Estimate for Ford’s first-quarter 2025 revenues stands at $35.51 billion, reflecting an 11% year-over-year decrease. The current consensus for first-quarter 2025 EPS is set at 7 cents, a striking reduction of 82.9% over the past month, indicating an 85.71% drop year-over-year.

For the entire year of 2025, the consensus for Ford’s revenues is $166.15 billion, showing a 3.78% year-over-year decline. The EPS expectation has decreased by 15% to $1.42, signifying a 22.83% drop from the previous year.

Ford managed to surpass the Zacks Consensus Estimate for earnings in two of the last four quarters, aligning with the estimate in one and missing in another, with the average surprise being 1.21%.

Conclusion

Ford is set to encounter significant challenges in 2025, including slipping sales, tariff ramifications, and pressures in the EV market, all likely to negatively affect the company’s stock performance.

Currently, Ford holds a Zacks Rank #4 (Sell), indicating that it may be prudent for investors to refrain from purchasing the stock at this time.

Key Picks

Looking for better options in the automotive sector? Consider General Motors (GM), Blue Bird (BLBD), and Zapp Electric Vehicles Group Limited (ZAPP), all of which carry a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for GM’s 2025 earnings has climbed 6.7% in the past month, projecting year-over-year growth of 8.02% with a current estimate of $11.45 per share.

Similarly, BLBD’s earnings estimate for 2025 has risen by 3.1%, suggesting a 15.61% annual increase, now pegged at $4 per share.

ZAPP’s 2025 loss projection remains stable at 84 cents per share, indicating a year-over-year improvement of 67.2%.

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Ford Motor Company (F): Free Stock Analysis report.

General Motors Company (GM): Free Stock Analysis report.

Blue Bird Corporation (BLBD): Free Stock Analysis report.

Zapp Electric Vehicles Group Limited (ZAPP): Free Stock Analysis report.

This article was originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.