Ford CEO Jim Farley takes 'radical approach' to big money loser

Ford plans to invest billions in American manufacturing, which will define the company in the coming decade.

On Monday, August 11, Ford Motor Co. (F) announced that it was increasing its investment in U.S. jobs by a couple of billion.

But Ford is pouring that money into a segment that has been struggling mightily.

Model e, Ford's electric vehicle segment, has been bleeding billions of dollars for years.

It lost $5.1 billion in 2024 after losing $4.7 billion the year prior. The $1.5 billion Ford's EV unit lost in the third quarter alone was actually an 8% improvement year over year.

Ford expects Model e losses to increase to $5.5 billion this year as the current White House plans to let the $7,500 EV tax credits that have been around for the past three years expire on September 30.

But Ford views the money as a necessary investment in the company's future.

Ford's electric division has been bleeding billions for years.

Image source: Robins/AFP via Getty Images

Ford doubles down on EV bet with $2 billion investment in Louisville plant

This week, Ford revealed that it is adding a nearly $2 billion investment in its Louisville Assembly Plant to assemble a $30,000 four-door midsize electric pickup truck that it says will launch in 2027.

The $2 billion investment is part of Ford's $5 billion investment in U.S. manufacturing.

“We took a radical approach to a very hard challenge: Create affordable vehicles that delight customers in every way that matters – design, innovation, flexibility, space, driving pleasure, and cost of ownership – and do it with American workers,” said Ford CEO Jim Farley.

While the money will secure about 2,200 jobs, the investment will make the assembly line more efficient, meaning the Louisville plant will employ 600 fewer workers than the 3,078 hourly employees it currently employs.

The new platform reduces parts by 20% compared to a typical vehicle with 25% fewer fasteners, 40% fewer workstations dock to dock, and 15% faster assembly time.

The EVs built on the new platform are expected to have a lower cost of ownership than a three-year-old used Tesla Model Y.

EV trends are going one way in the West, and another in the East

Electric vehicle popularity in China seems to diverge from the other two major EV markets.

Americans bought 1.5 million EVs in 2023, while the Chinese bought 8.2 million.

According to the International Energy Agency, European consumers purchased 3.2 million during the same period.

However, a new study by the oil company Shell suggests that consumer sentiment is trending in the wrong direction in Europe.

More automotive:

The 2025 Shell Recharge Driver Survey features responses from over 15,000 European drivers. The appetite to buy an EV among internal combustion engine (ICE) car drivers dropped to 41% from 48% last year.

While the sentiment also fell in the U.S., the 34% to 31% decline was less dramatic.

The biggest issue for European drivers is the cost of the vehicles, as 43% of drivers cited affordability as their top issue. Despite falling battery costs, European EV prices have stagnated in recent quarters.

While one may dismiss the survey because of the author's clear conflict of interest, at least one major European automaker wants relief on some of the levers that enhance EV demand.

This week, Mercedes-Benz CEO Ola Kallenius warned that the law banning internal combustion engines in Europe, set to go into effect in 2035, is a disaster waiting to happen.

“We need a reality check. Otherwise, we are heading at full speed against a wall,” CEO Ola Kaellenius told the German daily Handelsblatt, according to reports.

“Of course we have to decarbonize, but it has to be done in a technology-neutral way. We must not lose sight of our economy.”