Key Points
Ford's hybrids are likely more profitable than investors realize.
In fact, hybrid sales set a fourth-quarter and full-year record.
Ford's next major EV push could be a little late to the party.
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The last couple of years have been a bit of a whiplash effect with automakers such as Ford Motor Company (NYSE: F) and General Motors (NYSE: GM), among many others, announcing billions and billions of electric vehicle (EV) projects and ambitions. Those strategies quickly reversed when the U.S. EV industry was slower to gain traction than hoped.
Now, automaker attention is focused more on hybrids. While that might not seem like an important development, there's one huge thing for investors to know about this going forward.
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Profitability is key -- and surprising
Over a year ago, Ford CEO Jim Farley made a comment that unfortunately flew under the radar for many investors. At the time, the focus was on big EV plans, and hybrids were considered by many a cumbersome step toward full EVs that could be bypassed. But at a time when Ford is losing billions on its Model e division, responsible for its EVs, investors need to keep this in mind going forward.
"A year ago, we weren't covering the cost premium for hybrids with the price that customers paid us. We are now," Farley said at the Bernstein annual strategic decisions conference in May of 2024, according to Automotive News. "Customers are voting. They like these in-between solutions."
Image source: Ford Motor Company.
He would clarify that some of Ford's U.S. hybrid models have become more profitable than their gasoline counterparts, and this was in 2024 before Ford and suppliers focused on removing cost from critical components such as batteries.
Hybrids are driving gains
Not only are more of Ford's hybrids more profitable now, sales are gaining traction quickly for Detroit automakers. Ford sold more than 228,000 hybrids in the U.S. throughout 2025, good for a near 22% increase over the prior year. Hybrids set a Ford Q4 and full-year record for sales, and the F-150 hybrid retained its title as America's best-selling, full-size hybrid pickup, which is good news because trucks -- especially considering Farley's profitability comments -- carry a huge chunk of profits for Detroit autos.
Some hybrid market share gains are certainly coming from the full-electric market. In fact, Ford's full EV sales declined 14% in 2025 and plunged 52% during Q4 after the market sorted through the loss of the industry's $7,500 federal EV tax credit.
The road ahead
Investors' main takeaway should be that a step backwards to focus on hybrids, while the full-electric market develops, is positive news for the bottom line. It's also important for investors to know that Ford isn't giving up on EVs entirely, merely regrouping for a better push in the coming years with a new Universal EV Platform and midsize electric pickup in 2027.
Ford's hybrids are surging, and that's a good thing for investors, but it's still concerning that its next big push to full-electric options is a ways down the road.
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Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
