Ford plummets 18% after big 2nd-quarter earnings miss

• Ford stock plunged Thursday as the automaker missed Wall Street's earnings estimates.
• The downbeat quarter was driven by high warranty costs and a $1.14 billion loss in its EV division.
• The stock tumbled 18% on Thursday, its worst drop since 2008.

Ford shares hit their lowest point since January after the carmaker's most recent earnings missed targets, sparking its steepest single-day loss since 2008.

The company's shares tumbled over 18% as of 3:20 p.m. ET Thursday, trading at $11.23.

On Wednesday's earnings call, the carmaker reiterated its full-year profit guidance. It exceeded revenue expectations with $47.8 billion, compared to estimates of $43.37 billion, per Bloomberg.

However, earnings per share fell short, at $0.47 versus analyst estimates of $0.68.

Driving the losses were warranty reserves the company set aside to address issues with its vehicles.

Losses in the company's electric vehicle segment also weighed on profitability in the quarter. Ford saw a $1.14 billion loss in its EV business as demand slows in the market.

Ford's CEO Jim Farley said the company is now transitioning toward smaller EVs as it realizes that, unlike drivers of its gas cars, who value bigger trucks, its EV customers prefer smaller models.

For EVs, "the larger the vehicle, the bigger the battery, the more pressure on margin because customers will not pay a premium for those larger batteries," Farley told investors during Wednesday's earnings call.

Farley acknowledged that EVs have challenged the company, but he remained optimistic.

"Overall, the EV journey has been humbling, but it has forced us to get even more fit as a company," Farley said, adding that it will pay off in the long run.