Ford Motor Company has reported a staggering loss of $5.1 billion on its electric vehicle (EV) business in 2024, with predictions of another $5.5 billion in losses for 2025. The automaker's fourth-quarter and full-year earnings report, released on Wednesday, beat Wall Street expectations, but the EV business continues to struggle.

The losses are attributed to "headwinds related to market factors," according to Ford. Despite this, the company's gas-powered cars are still performing well, generating enough revenue to end the year with a net income of $5.9 billion and an adjusted earnings of $10.2 billion.

Ford's EV business, however, is lagging behind its rivals. General Motors, for instance, released several new EV models last year, including new Chevy and Cadillac vehicles, while Ford only has three battery-electric vehicles for sale. GM's EV business is showing signs of profitability, whereas Ford's continues to struggle.

Ford had previously cancelled plans to introduce an electric three-row SUV, hoping that its Silicon Valley-based skunkworks team would enable it to roll out cheaper models in the near future. The company is also expecting a tougher year ahead, with predicted earnings drops of $2 billion or more in 2025 due to costly new vehicle launches and falling car prices.

Notably, Ford's earnings report does not take into account potential cost increases associated with President Donald Trump's threat to impose 25 percent tariffs on imports from Mexico and Canada, nor the likely elimination of Biden-era EV incentives, such as tax credits and manufacturing credits.

The struggles of Ford's EV business raise questions about the company's ability to compete in the rapidly evolving electric vehicle market. As the industry continues to shift towards electrification, Ford's inability to turn a profit on its EVs could have significant implications for its long-term viability.

Despite these challenges, Ford remains committed to its EV ambitions. The company reported $1.4 billion in "cost improvements" from its Model e division, indicating efforts to streamline operations and reduce expenses. However, it remains to be seen whether these efforts will be enough to help Ford catch up with its rivals and turn a profit on its EV business.

The news comes at a time when the automotive industry is undergoing significant transformation, with electrification, autonomous driving, and changing consumer preferences driving innovation and disruption. As Ford navigates these challenges, its ability to adapt and evolve will be crucial to its success in the years to come.