Ford posts $1.3 billion net loss in Q2, China strategy enters critical adjustment phase

On July 28 local time, Ford Motor Company released its financial report for the second quarter of 2026.

During the quarter, the company's total revenue was $48.3 billion, a year-on-year decrease of 4%; under GAAP, the net loss was $1.3 billion, compared to a net loss of $36 million in the same period last year.

However, the loss was mainly driven by one-time items, namely a $3.6 billion non-cash charge related to the disposal of the BlueOval SK Battery joint venture in May, and a $500 million charge from the previously cancelled electric vehicle project. The total of these special charges is approximately $4.2 billion.

Excluding one-time items, Ford’s adjusted EBIT for the quarter was $2.5 billion, an increase of $400 million or about 19% year-on-year; adjusted earnings per share were $0.42, beating the analyst average expectation of $0.35. Revenue also exceeded Wall Street's expectation of $4.751 billion. As of the end of the second quarter, the company's total liquidity exceeded $43 billion.

By business segment, the Ford Blue gasoline vehicle division's revenue for the quarter was $26.1 billion, up 1% year-on-year; EBIT was $1.1 billion, up 72% year-on-year.

For the commercial vehicle segment, Ford Pro, revenue was $17.8 billion, a year-on-year decrease of 5%; EBIT was $1.7 billion.

The Model e electric vehicle segment saw revenue of $1 billion, down 56% year-on-year; the EBIT loss for the quarter was $919 million, but this marks the third consecutive quarter of narrowing annualized losses.

The BOSK joint venture was established by Ford and Korea's SK On in 2022, with an original plan to invest $11.4 billion to build three battery factories in the United States. In May of this year, the two parties completed a split: Ford took over two Kentucky plants, while SK On took over the Tennessee facility. According to Ford, these assets will be used for its battery energy storage business, Ford Energy, a newly established area for the company.

The main issue for Ford's business in China is that while sales have stabilized temporarily, the new energy product lineup has yet to be filled.

According to data released by Ford China, sales in China for the second quarter of 2026 were 158,589 vehicles, an increase of 3% from the same period last year. However, this growth was based on a relatively low base.

For Changan Ford, third-party retail platform data shows cumulative sales of only 28,800 vehicles in the first half of 2026. In 2025, Changan Ford's annual retail sales were 99,400 units, a sharp decline compared to 247,000 in 2024, and for the first time dropping below the industry-recognized “survival” red line of 100,000 units per year.

From a longer-term perspective, Ford's sales in China have continuously shrunk from the peak of 1.27 million units in 2016.

In terms of products, Changan Ford’s main sales still focus on gasoline models like Mondeo, Edge, and Explorer, with new energy offerings largely absent. The all-electric Ford Mustang Mach-E, previously highly anticipated, has performed weakly due to issues with product strength and pricing.

In December 2025, the Ford Zhique Lie Ma was launched, offering both range-extended and all-electric versions, starting at RMB 229,800. In addition, Changan Ford plans to launch the CX810 code-named new energy sedan, which is regarded as a key product for Ford's new energy transition in China.

At the strategic level, Ford China has defined 2026 as the year of “transformation, innovation, and acceleration.” At the dealer conference in January this year, Ford China President and CEO Sam Wu clarified a product strategy covering gasoline, hybrid, range-extended, and pure electric powertrains.

In terms of distribution, Ford China established a wholly-owned sales and service company in September 2025, which officially began operations on October 1, 2025, integrating the Changan Ford and Ford Zhuheng dealer networks, and managing all sales of Ford-branded passenger cars and pickup trucks in China under a unified structure.

Despite posting a net loss on paper in the second quarter, Ford for the second time this year raised its full-year guidance. The company raised its 2026 adjusted EBIT forecast from $8.5–10.5 billion to $10–11 billion; adjusted free cash flow increased from $5–6 billion to $6–7 billion.

Ford CEO Jim Farley said in the earnings statement: “We’ve delivered another strong quarter and raised our full-year guidance. But more importantly, there is increasing evidence that Ford is becoming a more profitable, more disciplined, and truly different company.”

Overall, operational improvements in Ford’s core North American market, combined with one-off strategic restructuring charges, resulted in a book net loss, but core profits excluding one-time items exceeded market expectations.

In the Chinese market, the American automaker is seeking new growth paths through product updates and channel integration, though results still await validation in future quarters.