Ford's Bronco RTR Model Highlights Hybrid Push Amid Deepening EV Losses

What happened

Ford announced a new 'more attainable' RTR performance model for its Bronco SUV lineup, positioning it as a gateway to the high-end Raptor while declining to disclose pricing. This move aligns with Ford's strategic pivot, detailed in recent filings, to bolster its Ford Blue segment's hybrid and ICE offerings as it retreats from unprofitable EV programs. The DeepValue report reveals guided 2025 adjusted EBIT dropping to $6.0–$6.5B from ~$10.2B in 2024, with Ford Blue EBIT falling to $3.5–$4.0B and Model e losses stuck around $5B annually due to pricing pressure and UAW costs. While the Bronco expansion may support volumes, it does little to counter structural headwinds like high leverage (net debt/EBITDA ~9.7) and compressing margins in a competitive market. Thus, this product launch is a tactical effort to exploit hybrid strengths but fails to address the core profitability erosion and EV drag threatening long-term value.

Implication

Investors should see this expansion as evidence of Ford's reliance on its Ford Blue segment for growth amid an EV pullback, yet it offers no pricing clarity to assess margin impact in a guided down EBIT environment. The DeepValue report's base case implies limited upside at $14.20, with risks skewed negative if Blue+Pro EBIT falls below $9B or Model e losses exceed $5.5B, unaffected by this launch. Monitoring remains focused on core margin stability and EV loss containment, where this news provides no incremental improvement. Given high leverage and entrenched losses, the stock's valuation already discounts a smooth plateau, not the guided earnings step-down. Therefore, while the narrative of hybrid focus is reinforced, the call to trim or underweight near $14.20 stands, with better entry only on a pullback toward $11 or clear profit recovery signs.

Thesis delta

The news confirms Ford's ongoing shift toward hybrids and trucks as outlined in the DeepValue report, but it does not materially change the investment thesis. No shift is warranted; the thesis remains a 'POTENTIAL SELL' with conviction, as earnings compression and EV losses persist unabated. Investors should continue to await evidence of structural improvements in core margins or reduced EV drag before reconsidering the position.