[Autobots] Ford and Stellantis: Electric Transition 'Cools Down'

Ford and Stellantis have abandoned loss-making electric vehicle (EV) businesses, prioritizing profitability and cash flow as core operational objectives. Author: Zhang Heng Recently, Ford and Stellantis released their Q2 2026 operating results. Globally, both companies posted strong overall performance—but continue to struggle in the Chinese market. Global Profitability Recovery Ford’s Q2 2026 global revenue totaled $48.3 billion, down 3.8% year-on-year; its reported net loss stood at $1.3 billion. However, this loss did not stem from core operations, but rather from a one-time asset impairment—Ford dissolved its battery joint venture BlueOval SK with SK On, resulting in a non-cash charge of $3.6 billion. Excluding this exceptional item, Ford’s operational health remains solid: its adjusted EBIT for Q2 reached $2.5 billion, up 17% year-on-year. Consequently, Ford has again raised its full-year profit outlook, now forecasting adjusted EBIT between $10 billion and $11 billion. Interestingly, Ford’s three major business segments show starkly divergent trajectories: • The gasoline and hybrid passenger vehicle division, Ford Blue, generated $1.1 billion in Q2 profit—a 72% surge year-on-year. High-margin models such as the F-Series trucks and Bronco have stabilized Ford’s North American home base and continued delivering robust cash flow. • Its commercial vehicle sub-brand, Ford Pro, remained stable, contributing $1.7 billion in Q2 profit—the group’s reliable source of cash flow. • By contrast, its EV division, Model e, posted a Q2 loss of $919 million. Although losses have narrowed for three consecutive quarters, profitability remains distant. Internal Ford estimates suggest this business will not reach breakeven until as late as 2029. Given this reality, Ford has revised its overall strategy: it disbanded its standalone EV division and cut production capacity for first-generation pure-EV models. Capital allocation has grown more rational, with deliberate shifts toward hybrid and extended-range electric vehicles—aiming to safeguard overall profitability. Stellantis’ Q2 2026 performance also rebounded: group revenue hit €43.5 billion, up 13% year-on-year; adjusted operating profit reached €773 million, with an operating margin of 1.8%—a 120-basis-point improvement year-on-year—successfully reversing prior losses to achieve profitability. Stellantis’ regional performance varied dramatically: the North American market surged, with revenue up 32% year-on-year—high-margin Ram trucks and Jeep SUVs fully leveraged their pricing power; the European market remained flat and stable; while the Asia-Pacific and Chinese markets stayed sluggish, showing no meaningful recovery. Stellantis’ strategic shift closely mirrors Ford’s. Its management has acknowledged having overestimated the pace of global EV adoption. The company has halted blind expansion across the battery supply chain and ceased mass launching new pure-EV models with poor cost-performance ratios. Its current strategy is more pragmatic: retaining internal-combustion vehicles, ramping up hybrids, and advancing pure-EV development steadily—using profits from mature businesses to fund transitional initiatives. Over the past two years, persistent volatility in upstream resource costs—including unstable prices for key battery materials like lithium and cobalt—has further inflated long-term EV production costs.

Bloomberg Daily Briefing: AI Audit Season Arrives—Tech Giants Diverge Sharply (20261029)

Key Takeaway: The U.S. Federal Reserve’s FOMC voted 10–2 to hold the benchmark interest rate steady at 3.75%–4.0%; Chair Kevin Warsh did not signal clearly whether the next move might be a hike, leaving the policy path uncertain. Commentary: Prolonged external high interest rates are lengthening financing cycles and pressuring overseas valuations for domestic enterprises—cash flow now matters more than growth narratives. U.S. Office Buildings Auctioned at 70% Discount Key Takeaway: A real estate investment firm acquired a Boston office building at one-third of its 2019 purchase price via judicial auction—highlighting severe damage to the U.S. office sector, even though signs of stabilization have emerged in some cities. Commentary: Asset repricing is far from complete; domestic commercial offices and industrial parks must pivot from selling space to generating operational cash flow—and beware of lagging collateral valuations. Bank of Canada Hikes Rates to Curb Housing Market Key Takeaway: The Bank of Canada raised interest rates to combat inflation—but dealt another blow to an already-weak housing market, increasing mortgage costs and homebuying pressure. Commentary: Housing demand is highly sensitive to interest rates under high-rate regimes; domestic policy must precisely support first-time buyers and project delivery chains—avoiding unintended harm. Deutsche Telekom’s T-Mobile Merger Stalls Key Takeaway: Deutsche Telekom’s proposed merger with T-Mobile US has stalled; no formal offer has yet been submitted—partly due to opposition from T-Mobile’s works council. T-Mobile’s stock has fallen nearly 30% this year, with a current market cap of ~$156 billion; Deutsche Telekom holds over 50% of its shares. Commentary: Cross-border mega-mergers often fail over governance and labor issues; enterprises from a certain Eastern country must proactively align stakeholders before going global. Ford Raises Full-Year Profit Guidance Key Takeaway: Ford raised the lower end of its full-year profit forecast, aided by disciplined cost control and strong demand for trucks and SUVs—helping it withstand inflationary pressures and geopolitical tensions stemming from the U.S.-Israel–Iran conflict. Commentary: Traditional automakers survive on high-margin models; amid domestic price wars, local automakers must protect profitable niche segments. Musk’s Satellite Business Sparks Controversy Key Takeaway: Elon Musk reportedly spent hundreds of millions of dollars supporting Republican candidates to retain control of both U.S. congressional chambers; he is accused of restricting Ukraine’s satellite network—Kyiv claims this led to civilian deaths; Russian President Vladimir Putin stated that Russia coordinates low-earth-orbit (LEO) satellite networks with Musk and other U.S. partners. Commentary: LEO satellite infrastructure has evolved from commercial utility into a geopolitical lever; enterprises from a certain Eastern country must prioritize compliance and respect data sovereignty boundaries when expanding overseas.

Ford Raises Outlook Even as War, Inflation Exacts Mounting Toll

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Ford raised its annual profit forecast despite $2.5 billion in rising commodity costs driven by inflation and geopolitical tensions. The company cited strong SUV demand while noting record copper and steel prices as significant financial headwinds.

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Ford Raises Outlook Even as War, Inflation Exacts Mounting Toll

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