Ford's Model e loss is shrinking, but trucks still foot the bill

Is losing $1.058 billion in three months good news? At Ford, apparently yes, as long as you squint at the right line. The company's electric unit, Model e, lost less than a year ago. Its revenue also fell sharply.

Here is what happened. As AOL reports, Ford posted about $2 billion in net income for the third quarter of 2026 on $49.5 billion in revenue, and raised the bottom of its full-year operating income guidance to $10.5 billion–$11 billion. Model e's loss was $1.058 billion, versus $1.41 billion in the third quarter of 2025. Its revenue fell 31% to $1.2 billion. Ford still expects Model e to lose about $4 billion this year and to turn a profit by 2029.

A smaller loss on 31% less revenue is triage, not a turnaround

The 25% improvement is real, and in our view it supports the thesis that the EV bet can be fixed. Ford's press release says the unit is optimizing first-generation vehicles for profitability. That's the right instinct: stop bleeding on products that were never going to be profitable.

But we'd be careful about celebrating. A loss that shrinks while revenue drops by almost a third looks more like cutting exposure than winning customers. Nor is the trend a straight line. According to Seeking Alpha's summary of the call, the loss widened from $919 million in Q2 to $1.1 billion in Q3. Year over year is the flattering comparison. Quarter over quarter is the sober one.

Still, we think management deserves credit for not pretending. A target of profitability by 2029 is long enough to be credible and short enough to be held against them.

The trucks are the real EV program

Look at who is paying. Ford Pro, the commercial vehicle business, earned $1.665 billion in operating income in the quarter, and Ford Blue, the combustion and hybrid business, earned $1.392 billion. Together they covered Model e's hole and then some. The CFO, Sherry House, said Super Duty demand and orders have been resilient.

That is, as we read it, the uncomfortable truth of the legacy-automaker EV transition: it works like an internal subsidy. The buyers of trucks and combustion vehicles fund the electric future whether they know it or not. It works as long as those vehicles keep selling, and the risks are on the table: rising commodity costs, supplier disruptions, and, per House, a 2027 where profit looks similar to 2026. Flat profit and a still-large EV loss leave little room for error.

Our read is that this is defensible but not comfortable. Ford Pro's operating margin already slipped to 9.4% from 11.4% a year earlier, and if the profit engines weaken further, the subsidy gets thinner right when the company needs to spend more on the new platform.

Fathom is the only number that matters now

The thing missing from Ford's lineup is, in our view, a cheap hit. The answer is the Fathom, a midsize truck on the new Universal Electric Vehicle platform, due in late 2027 at a starting price of $28,350, with higher trims in the upper $30,000s and pre-orders opening in the first quarter of 2027. Ford says it has already manufactured more than 5,000 large aluminum unicastings, and that each Fathom's front and rear castings simplify assembly from 146 structural parts.

That looks like a smart design bet: fewer parts, lower cost, a lower price. We also like that it can power a home without a separate inverter, which turns a feature into a selling point. But notice where executives say the biggest upsell opportunity lives: digital features, long-term subscriptions and advanced driver assistance. That's a plan, and plans aren't revenue. Whether American buyers will pay recurring fees on a $28,350 truck is, in our view, the biggest open question in the whole story.

There's also a calendar problem. Ford expects to lose about $4 billion on EVs this year while it waits for a vehicle that arrives in late 2027, and profitability is promised for 2029. That is a long stretch in which rivals can move first.

Verdict

The loss shrinking is real progress, and it suggests the EV business can be repaired rather than abandoned. But it's repair by retrenchment, funded by the profitable units. Don't judge Ford's EV strategy by this quarter. Judge it by two things: whether the Fathom launches on time at that price, and whether Ford Pro and Ford Blue stay strong enough to keep paying. Until then, the honest description is a company buying time at about $1 billion a quarter.