Ford May Sales Plunge -13.6%, But UBS Says 2026 Remains On Track

Ford reported U.S. sales of 190,828 units in May, down 13.6% year over year, bringing year-to-date sales to 826,810 units, down 11%. The declines were broad-based, reflecting ongoing weakness in EV demand and continued portfolio shifts away from certain lower-margin vehicles. EV sales fell nearly 44% during the month, while hybrid sales declined 16%.

Among key nameplates, Mustang Mach-E and F-150 Lightning both posted declines of roughly 45%, while Escape sales fell more than 80% as Ford continues to de-emphasize the model. Offsetting some of the weakness, Bronco, Explorer, Maverick, Transit and Heavy Trucks all delivered year-over-year growth.

The sales results generally appeared consistent with management commentary at the UBS Autos and Auto Tech Conference, where Ford indicated that industry demand trends in May unfolded largely as expected. Executives specifically noted that some of the volume declines associated with products such as Escape were anticipated as the company continues shifting its mix toward higher-margin vehicles.

More importantly, management reiterated that 2026 is tracking in line with expectations outlined during first-quarter earnings. A key focus remains the recovery from the Novelis aluminum supply disruption, which is expected to result in $1.5 billion to $2.0 billion of incremental costs this year. Ford incurred approximately $300 million of those costs during the first quarter and expects the impact to increase during the second and third quarters before easing as Novelis returns to full capacity in the fourth quarter. According to management, the recovery remains largely on track despite some expected unevenness along the way.

The company also remains comfortable absorbing an estimated $2 billion year-over-year commodity headwind, which is fully incorporated into Ford's $8.5 billion to $10 billion adjusted EBIT guidance. Management additionally pointed to stable pricing conditions, suggesting that recent industry concerns about demand deterioration have yet to materially impact Ford's business.

Looking beyond 2026, Ford outlined several potential earnings drivers for 2027. The most obvious benefit will be the absence of the Novelis-related costs, but management also highlighted ongoing improvements in warranty performance, material costs and launch expenses as the company moves beyond several major investment cycles. Ford expects these gains to help offset spending associated with future growth initiatives.

Those initiatives continue to center around Battery Energy Storage Systems (BESS) and Ford's next-generation EV architecture, which management increasingly describes as a broader platform opportunity rather than a single vehicle program. The company plans to invest approximately $1 billion across BESS and the Universal Electric Vehicle (UEV) platform this year, with spending accelerating in the second half.

Ford remains particularly enthusiastic about the UEV platform, which is scheduled to launch in 2027. Management believes the architecture can support feature-rich, technology-focused vehicles at price points around $30,000, potentially allowing EVs to compete directly with internal combustion vehicles rather than just other EVs. Prototype vehicles are already being tested in Michigan, and executives continue to emphasize the platform's scalability and potential for attractive economics as volumes grow.

The BESS opportunity also appears to be gaining importance in Ford's long-term strategy. Management highlighted progress toward bringing its 20 GWh facility online by the end of 2027 and expressed confidence regarding eligibility for production tax credits and other incentives. Executives suggested that Ford's licensing arrangement with CATL provides a unique advantage that may be difficult for competitors to replicate, while also noting that the company sees no current issues regarding supply-chain compliance.

Another potential source of upside is Ford's Super Duty business. Management indicated that the capacity ramp continues to progress well, providing additional optionality should demand remain strong.

Taken together, the UBS discussion reinforced the view that Ford's investment story is becoming less about monthly sales fluctuations and more about the earnings framework management is building for the latter part of the decade. While May sales remained under pressure, management's message was largely unchanged: 2026 is unfolding as expected, the Novelis recovery remains on track, and the company continues to position itself around battery storage, next-generation EVs and a structurally more profitable core business heading into 2027.

Tyler Durden Thu, 06/04/2026 - 09:00