Ford Motor reported a sharp decline in electric vehicle sales in the first quarter, with volumes falling nearly 70% year-on-year as affordability pressures and reduced incentives weighed on demand.
The drop comes amid higher financing costs, elevated vehicle prices and the expiry of federal tax credits for EVs, factors that have made electric models less accessible to consumers despite rising fuel costs.
Overall, Ford’s U.S. vehicle sales fell about 9% to 457,315 units in the January–March period. Truck sales declined 11.3% and sport utility vehicles fell 7.8%, reflecting weaker demand across key segments.
Industry-wide trends were also softer. Total U.S. auto sales declined 5.3% in the quarter, according to Omdia, while rivals including General Motors and Toyota reported lower sales.
The decline in EV sales follows a broader strategic shift by Ford. In December 2025, the company said it would significantly reduce investment in fully electric vehicles, pivoting toward hybrids and extended-range electric vehicles (EREVs), while cancelling several planned battery-electric models. The move is expected to cost about $19.5 billion.
In February 2026, Ford reported a $4.8 billion operating loss for its battery-electric vehicle division, Model e, in 2025, compared with a $5.1 billion loss a year earlier, underscoring ongoing financial pressures in its EV business.
The Model e unit includes battery-electric passenger vehicles such as the Mustang Mach-E and F-150 Lightning, as well as models like the Explorer and Capri built in Europe. Electric commercial vans, including the E-Transit range, are reported separately under the Ford Pro division.
Rising energy prices linked to geopolitical tensions have added pressure on household budgets. While such conditions can typically support EV adoption, analysts said high upfront costs and reduced policy support are limiting demand.
Consumers have increasingly shifted toward lower-priced vehicles, with combined sales of entry-level versions of Ford’s Maverick, Ranger and Bronco Sport rising 8.4% during the quarter.
