Analysts at Morgan Stanley warn that Ford Motor could face significant headwinds to both production volumes and profit margins in the coming quarters. Specifically, memory chip shortages are projected to constrain output of key high-tech features—particularly in its higher-trim pickups and SUVs—by an estimated 5–7 percent through mid-2026. At the same time, prices for steel, aluminum and copper have climbed by an average of 12 percent year-over-year, squeezing per-vehicle gross margin by approximately $250. Morgan Stanley’s base case assumes Ford will see a 3 percent reduction in full-year 2026 vehicle deliveries coupled with a 30-basis-point drop in adjusted automotive gross margin, which could translate into a $1.2 billion impact to operating profit if commodity and chip pressures persist.

The National Highway Traffic Safety Administration has ordered Ford to recall 119,075 U.S. vehicles due to a potential underhood fire risk stemming from a cracked engine block heater. Affected models span five nameplates—2013–2018 Focus, 2013–2019 Escape, 2015–2016 Lincoln MKC, 2019 Explorer and the 2024 Explorer. Regulators estimate that 1,191 vehicles contain the defect, which can lead to coolant leaks and short circuits when the heater is plugged in. Ford will replace the heater free of charge and is mailing interim owner notifications by February 13, 2026, with a final remedy slated for April 2026.

In December Ford announced a shift away from large electric trucks toward hybrids and smaller EV models, triggering a $19.5 billion non-cash impairment charge on its electric vehicle division. Excluding that charge, revenue for the first nine months of 2025 rose 3 percent to $141.4 billion, though adjusted operating income declined from $8.1 billion to $5.7 billion largely due to a fire at a key supplier’s aluminum plant. Despite the one-time hit, management believes the refocused portfolio will deliver stronger profitability over time, with analysts forecasting adjusted earnings per share of $1.52 for 2026, up from a projected $1.10 for 2025 and implying a mid-single-digit return on equity as chip and commodity issues abate.