Ford Is Taking Lemons in the World's Largest Auto Market and Making Lemonade

Key Points

A saturated new-energy vehicle market and competitive landscape have created a price war in China.

China's auto exports are surging as automakers turn it into a low-cost export hub.

Ford and Kia were leading the strategic shift, enabling them to keep doing business in the region.

• 10 stocks we like better than Ford Motor Company ›

As recently as a decade ago, foreign automakers were planning on China's massive and growing automotive industry to turn into a second pillar of profitability, standing next to North America, to support long-term growth.

Unfortunately, China's automotive market pushed the boundaries of electric vehicles (EVs) more quickly than anticipated, and created a market that was roughly 50% new-energy vehicles -- and a market that foreign automakers such as Ford Motor Company (NYSE: F) struggled to compete in.

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

When life gives you lemons, you know what to do -- and Ford is leading the charge.

Lots and lots of lemons

Many investors following the automotive industry understand that China's auto industry has been stuck in a brutal price war, driven by an influx of competitors trying to carve out their niche in the growing EV market. That said, more data is coming in that emphasizes just how brutal this price war has been on profits.

More than half of China's car dealerships became unprofitable just last year, with 56% of dealerships booking losses in 2025, up significantly from 42% in 2024, according to the China Automobile Dealers Association. However, when accounting for the number of dealerships merely breaking even, it looks even worse, with only 24% of dealers in China reporting a profit. The price war has forced 82% of dealerships to retail new vehicles at prices below wholesale, an unsustainable metric.

With the price war showing no signs of abating anytime soon, automakers were forced to switch gears, and quickly.

Making lemonade

With foreign automakers struggling to compete with domestic rivals in China, many have begun to switch to turning the country into a low-cost vehicle export hub, sometimes partnering with local producers to send outgoing vehicles with some of China's latest software and tech. Ford is one of the leaders in this shifting of gears.

In fact, just about a year ago, Ford CEO Jim Farley gave investors a glimpse at the difference the shift in priorities has made. After six straight annual losses in China, its operations turned a profit in 2024. While Ford long ago stopped being as transparent with data out of China, it's not too difficult to see what helped this profit boost. In 2024, Ford exports from China surged 60% to roughly 170,000 vehicles, compared to its wholesale deliveries with joint venture Changan Automobile Co. rising only 6% to 247,000 vehicles.

At the end of the day, it's unfortunate for long-term investors that China is highly unlikely to ever become the second pillar of global profitability for automakers. The silver lining is that Ford has been able to not only shift gears to exports and turn around losses, but it was one of the first automakers to pioneer this strategy. This is helpful for long-term investors because it buys Ford time to become more competitive with EV development and costs, which it could gain from valuable partnerships in the country.

Hopefully, one day Ford can boast a rebound in its domestic China sales, but until then, exports are turning around losses and turning lemons into lemonade.

Should you buy stock in Ford Motor Company right now?

Before you buy stock in Ford Motor Company, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ford Motor Company wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $555,526! Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,156,403!

Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 191% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

**Stock Advisor returns as of April 11, 2026. *

Daniel Miller has positions in Ford Motor Company. The Motley Fool has no position in any of the stocks mentioned. 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.