Ford's Mach-E Woes Fuel EV Sales Slump: Is it Re-Strategizing?

Ford F currently has three models in its electric vehicle lineup —Mustang Mach-E SUV, F-150 Lightning pickup truck and E-Transit van. The company reported that in the second quarter, its EV sales plunged 31.4%. EV deliveries dropped from 23,957 units in the same period last year to 16,438 units this year. The slump was mainly due to a recall and a further halt in Mustang Mach-E deliveries.

Mustang Mach-E’s software glitch in electronic door latches posed serious risks of getting trapped inside or left outside the car. While a software update to fix this is expected to come out in the third quarter, the second quarter witnessed the recall, causing a setback to more than 317,000 vehicles globally. Another reason for such a sharp decline was Ford’s prep for the model year 2025, causing factory shutdowns and resultant inventory shortages for all three EVs.

Ford sold 5,842 F-150 Lightning trucks in the second quarter, marking a 26% decline compared with second-quarter 2024. Mustang Mach-E sales dropped 19.5% to 10,178 units, while E-Transit sales plunged 87.7%, with just 418 units sold.

The troublesome conditions of its EV segment have led Ford to reconsider strategy and refocus on affordability. Ford is on its way to bring out a new lineup of EVs, beginning at prices lower than $30000. It is set to be launched in 2027. The loss in momentum also draws eyes toward Ford’s exposure to tariffs, as only 13% of its top-selling model, Mustang Mach-E, is U.S. content. With an existing stop sale order and tariff woes looming, its best-selling EV is anticipated to face a big hit.

Ford’s broad lineup of electrified hybrids stands to rescue with a record sale of 156,509 units in the first half of 2025, powering its U.S. vehicle sales to grow 14.7%.

Peer Comparison

General Motors Company (GM), the American automaker giant, witnessed a strong second-quarter sales growth of 111% of EVs compared with the previous-year quarter. It now has a lineup of 11 EV models, of which Chevrolet has displayed the highest growth of 134% in the H1 sales, led by Equinox EV, which has secured General Motors’ place among the top three best-selling EVs. Similarly, Cadillac emerged as the luxury EV market share leader in the second quarter. General Motors boasts an EV market share of 16%.

Tesla, Inc. (TSLA), the pioneer in EV technology, has seen deliveries shrink in the second quarter as it struggles with a dated lineup, expensive pricing and the controversial politics. It reported 384,122 vehicle deliveries. The figure declined 14% from Tesla’s year-ago level of 443,956. This was the second consecutive quarter that Tesla witnessed double-digit declines.

The Zacks Rundown for Ford

Shares of Ford have lost around 1.9% over the past year compared with the industry’s decline of 2.1%.

From a valuation standpoint, F trades at a forward price-to-sales ratio of 0.29, down from the industry average. It carries a Value Score of A.

Take a look at how Ford’s EPS estimates have been revised over the past 30 days.

Ford currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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