Ford earns its StripesFord is giving its e-commerce capabilities a service, hoping it’ll accelerate its recent successes.
- Ford has inked a deal with Stripe, a popular payments processor, to spend the next five years facilitating the transformation of its e-commerce and payments infrastructure.
- It’s making changes on all corners of the street. It recently made a deal with Amazon (AMZN) to install FireTV into its 2022 SUVs.
- It once again all goes back to its Ford+ restructuring plan, which focuses on electrification and growth and has been a main driver of a bull run that’s added nearly 95% to the stock since September.
Deva Darshan / Unsplash
A tour of the $100bn clubFord donned its best tyres for a visit to the $100bn car club – but will it be invited back as a full time member?
- Ford spiked nearly 6% on Thursday, closing above $25 for the first time since 2001. It’s in the midst of a five month winning streak that’s added 92% to prices since September.
- Its market cap briefly spiked past $100bn for the first time, leaving rival GM (GM) in its dust with a $88bn market cap – though there’s a few miles to go before overtaking Tesla (TSLA).
- The gains have been fuelled by CEO Jim Farley’s EV push, which has seen the automaker double its electric pickup production thanks to crazy demand.
Rafal Jedrzejek / Unsplash
On track to the topFord CEO Jim Farley’s dream of taking over the EV market is getting closer to reality after a “truly breakthrough year” for the stock.
- Prices jumped nearly 5% on Monday to start the year at a new all-time high in celebration of its record-breaking 2021.
- Gains of 136% in 2021 made Ford the auto industry’s top growth stock for the year, easily outpacing top dog Tesla’s (TSLA) increase of under 47%.
- CEO Jim Farley and his Ford+ Turnaround Plan have been a gamechanger for the stock, with prices increasing over 200% since he took the reins in October 2020.
Simon Fitall / Unsplash
Ford is fired upDemand for Ford’s new electric pickup is flying off the charts, taking share prices along for the ride.
- Ford cruised up 9.61% on Friday to hit its highest price since August 2001.
- It had to stop taking reservations for its F-150 Lightning electric truck because it’s so popular. It stopped taking orders at 200k, and hopes to double its original production target of 80k.
- “Second place is the first loser”. CEO Jim Farley is determined to tackle EV giant Tesla, and wants to make 600k EVs by 2023.
Trying to topple a $1tn giantMorgan Stanley (MS) thinks Ford could beat out GM (GM) in 2021 deliveries, but is it enough leave Tesla in its dust?
- Prices popped over 2% on Wednesday, starting December with a bang after gaining 12% last month.
- Ford is on track to out-sell GM (GM) with its EVs this year, according to Morgan Stanley (MS). It’s only because GM are dealing with a recall though, so it’ll be back with a vengeance next year.
- Both are piling money into their EV efforts. Ford’s CEO wants it to be the world’s second biggest EV maker in the next few years.
Pulling the plug on the Rivian dealFord and Rivian divorce on their deal to make a new EV baby together.
- The pair have been working on a collaboration since 2019 when Ford invested $500m into Rivian – its 12% stake is now worth over $10bn after a supercharged IPO.
- There’ve been a few bumps along the way. They scrapped plans to make an electric Ford Lincoln together in October.
- Ford recently doubled its EV production goals for 2023 (to 600,000 cars) and signed a new deal with semi-chip giant GlobalFoundries.
Illustration by TradingView
Ford’s powerful EV newsFord is leaving the chip shortage in the dust with a new deal.
- Ford inks a deal with GlobalFoundries for the development and production of semiconductor chips for its vehicles.
- The company managed to sidestep the shortage in Q3, according to its recent earnings beat, though deliveries are still facing severe delays.
- CEO Jim Farley has big dreams of becoming the world’s biggest electric car maker, producing 600,000 EVs a year by 2023. However, analysts think he’s being a bit ambitious.
20/20 vision: Ford gets its groove backFord reaps the rewards of going green as shares top $20 for the first time in 20 years.
Ford flirts with bond buy-backFord is twiddling with its balance sheet in order to budget for its big electric dreams.
💰 It’s repurchasing up to $5bn of junk bonds in a bid to boost its credit rating, after losing investment-grade status in March 2020.
🚨 The balance sheet became bloated last year when it needed emergency funding after Covid closures.
⚡ The restructure is all part of the Ford+ Turnaround Plan, which will deepen its EV efforts and sustainable investments.
October drives Ford recoveryCrack open the champagne – Ford’s losses scale back to single digits for the first time in six months.
• New releases pumped up October sales with numbers down just 4% y-o-y (the first single digits since May).
• Shares are recovering. Ford closed Wednesday up 3.44%, a 20% jump since strong earnings were released October 27.
• What semiconductor shortage? It could be an early sign that the auto industry is finally recovering from the disastrous chip shortage of the past year.
Slade Lapusnak / Unsplash
Ford drives ahead on earnings expectationsShares of leading automaker Ford were up in after-hours trading on Tuesday as investors digested its latest earnings report, which beat on both the top and bottom lines and revealed optimism for the rest of the year. Ford reported earnings per share of $0.51 on automotive revenue of $33.21 billion, exceeding forecasts of $0.27 in earnings per share on $32.54 in automotive revenue. The company brought in $3 billion in operating profit and $37.5 billion in sales, both of which beat analyst expectations as well.
The thing that really got people’s attention was the return of Ford’s quarterly dividend payments to shareholders. The automaker suspended its dividend payments over a year and a half ago when the COVID pandemic was starting to take hold, but the “strength of the business” means that Ford is able to start paying its shareholders their dues – starting with a fourth quarter dividend of $0.10 on December 10. Going forward, it looks like things are set to get better and better, with the automaker increasing its annual forecast for the second time this year – full year guidance is now between $10.5 billion and $11.5 billion, and investors can expect free cash flow of between $4 billion and $5 billion.
The news is even more impressive considering the global chip shortage, which has held back the tech and automotive industries with a severe lack of parts – Ford however seems to be managing through the drought just fine, with its third quarter numbers being boosted by increased availability of chips and higher vehicle shipments. Competitor General Motors (GM) on the other hand, saw its earnings and sales take a major hit from the parts shortage. Ford CEO Jim Farley said:
I believe we have the right plan to drive growth and unlock unprecedented value. You’re already seeing favorable change in the slope of our earnings and cash flow. There’s more to come. We are creating a spring-loaded future as we emerge from the chip shortages and COVID constraints.
Ford stock was up over 9% in after hours trading on Wednesday.
Ford invests in the UKFord invests £230 million to transform one of its UK facilities into an electric power plant unit.
It’s out with the old and in with the new, with Ford spending £230 million on changing one of its gearbox plants in the U.K. into a facility that will manufacture electric car parts, all in the aim of fulfilling its EV goals. The automaker pledged last month that at least 40% of global sales will be EVs by 2030, as it prepares for the extinction of combustion engines.
chris robert / Unsplash
Ford isn’t forgetting about its OG vehiclesIn the midst of an impressive push into EVs, Ford isn’t forgetting about its OGs, giving its Ford Focus a facelift and unveiling a new 2025 version of its famed Bronco.
Ford has been making a big push into the EV space recently, announcing a $11 billion investment into electric vehicle plants in September, but its latest unveiling is all about its day one’s. The automaker is giving its Ford Focus a refresh, inside and out, and fans can expect the car from 2022. The company has also announced that it will soon start taking orders for the next generation of its popular Ford Bronco, which will start deliveries in 2022, and surprised fans with news that the car will get a mid-cycle 2024 update – a year earlier than expected.
Ford may have hyped up the EV side of life a little too much though, with existing customer reservations coming in at only 25%, which is half of the 50% the automaker was expecting.
Ford comes out on top with new spending billThe Democrats proposed $3.5 trillion social spending bill outlines a bunch of tax credits to people using EVs, but there’s a catch – those buying from unionized automakers (like Ford) will get higher tax credits of around $12,000, while those who buy from unionized EV makers like Toyota and Tesla will only get around $7,500 in credits. While Ford is one of the few that could come out on top of the new proposed bill – other automakers have a thing or two to say. Tesla CEO Elon Musk tweeted:
Written by Ford/UAW lobbyists, as they make their electric car in Mexico. Not obvious how this serves American taxpayers.
Honda called the bill “unfair” and said:
(This bill) discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union. The Honda production associates in Alabama, Indiana and Ohio who will build our EVs deserve fair and equal treatment by Congress.
Eleven Toyota execs got together to write a letter to the committee saying:
We urge you to reject using the country’s limited resources to give exorbitant tax breaks to those wealthy enough to buy high-priced cars and trucks. The proposed $7,500 tax credit for EVs makes these vehicles more accessible to Americans of modest means, and we support it.
This is all part of Biden’s goal to make 50% of all U.S. cars electric by 2030, so it’ll be all eyes on EVs as more changes come their way.
Ford sheds its Indian assetsAfter recently halting all operations in India, Ford is shedding its assets and is in talks with Tata Motors about selling its Chennai unit.
In early September, Ford put an end to its long and costly attempt to build a presence in India, shutting down all operations in the country and taking a hit of around $2 billion. Now, Ford is trying to get rid of all its assets in the region, and is in talks with homegrown automaker Tata Motors to buy its units in Tamil Nadu and Gujarat. If the deal goes through, it’ll be Tata’s second massive purchase from a U.S. automaker that has pulled out from India – in 2008, the company bought Jaguar Land Rover from Ford (F) in a deal worth $2.3 billion.
Ford ended the day up 5.45% at its highest price since the beginning of July.
Ford is recoveringFord’s third quarter sales saw numbers that are well on the way to recovery, but still down by over 27% in the face of supply shortages.
Ford’s third quarter sales show an improvement from last quarter and reveal increasing monthly numbers, but sales are still down 27.4% from the same quarter last year as the automaker battles with the semiconductor shortage. On the bright side, analysts were expecting a decline in sales of between 30% and 40%, and the monthly breakdown shows that recovery is on the way. September specifically saw an uptick in momentum as chips are slowly becoming available.
Ford popped 4% on the news to its highest price since July before settling to close up 1.34%
Jakob Rosen / Unsplash
Ford and GM shift into settlement gearAfter Ford launched its very own hands-free highway driving tech and called it “BlueCruise”, automaker competitor General Motors (GM) spoke out against the name, saying it was too similar to its own Super Cruise system. Ford got slapped with a trademark lawsuit in July, but the pair have reportedly decided to come to a settlement over the disagreement, and will come back to the judge if they’re able to reach a mutual agreement in the next 60 days.
Ford invests $11 billion into EVsFord has increased its commitment to the world of electric vehicles, with plans to invest in around $11.4 billion into three new battery gigafactories and a giant 3,600-acre campus in west Tennessee. The new production plants will be dedicated to building electric vehicles and the batteries that they run on, ramping up its EV production in a big way. President Joe Biden has recently called for companies to bring their production into the U.S. as the tech industry grapples with ongoing supply chain issues.
This is the new Ford. It’s time. We are putting shovels in the ground, 11,000 new workers. … It’s an enormous commitment to build these digital products.
Prices ended Monday up 2.76%.
Ford boosts UK presenceFord is weighing up whether to build its transmission systems for electric cars at its Halewood plant in the U.K rather than at a site in Germany. The decision will be made in the next few weeks and will be a big win for the U.K. car industry, which is lagging behind its fellow European countries.
Ernest Ojeh / Unsplash
Ford takes a CFO out of Tesla’s bookFord partners with Tesla co-founder JB Straubel and his materials company to produce its latest batteries.
Ford signs a deal with Redwood Materials, which is a start-up owned by Tesla co-founder JB Straubel and will help the automaker with its battery supply and recycling. As part of the deal, Ford has invested $50 million into Redwood, which was part of the startup’s recent $700 million funding round.
Ford ended the day up 3.6%, along broader market recovery following the short-lived Evergrande crisis took Ford down over 6% at the start of the week.
Risky roofs lead to a recallFord has had to recall 5,000 electric SUVs in Canada because there’s a chance the roof and windshield could fall off. The auto industry is having a giggle because less than a year ago, Ford’s head of development Darren Palmer made fun of Tesla for having the exact same issue, claiming that on Ford vehicles:
The doors fit properly, the plastics and other materials color-match, the bumpers don’t fall off, the roof doesn’t come off when you wash it, the door handles don’t get stuck in cold weather…
Whoops, looks like Palmer may have spoken too soon. Ford prices are still down after Chinese real-estate giant Evergrande (3333) sparked fears of economic instability on Monday, now down just under 6% for the week.
Adrian N / Unsplash
Ford feels the heatJust as Rivian beat out the market to the first electric truck release, Ford steps up its game and boots its F-150 Lightning production capacity.
EV start-up Rivian has just beat out the rest of the market and become the first automaker to produce an electric truck – and other automakers are feeling the heat. Ford said on Thursday that it is putting another $250 million into production of its F-150 Lightning electric pick-up. Based on strong demand, the automaker is upping its capacity to 80,000 vehicles per year and adding about 450 jobs across three facilities. The electric truck already has over 150,000 reservations, and Executive Chairman Bill Ford said:
The interest from the public has surpassed our highest expectations.
Alan Levine / Pxhere
Ford dives into self-driving deliveriesFord is teaming up with retail giant Walmart (WMT) and auto-driving technology company Argo AI to step into a new age of efficient deliveries: Driverless cars to deliver your groceries. The service will deliver Walmart (WMT) products with Ford cars that are equipped with Argo AI technology. Argo’s founder and chief executive, Bryan Salesky, said:
Our focus on the testing and development of self-driving technology that operates in urban areas where customer demand is high really comes to life with this collaboration. Working together with Walmart and Ford across three markets, we’re showing the potential for autonomous vehicle delivery services at scale.
Ford is a backer of Argo AI, so the partnership makes sense.
Andre Tan / Unsplash
Another new hire for FordFord makes its next high-profile appointment of the week, hiring online sales veteran Mike Amend.
Former President for online retail company Lowe’s, Amend has been hired to join Ford as the automaker's new chief digital and information officer.
Amend will contribute to the company's software, data, and technology changes under its electrification program – proving that Ford is intent on bolstering its digital offerings. This is Ford’s second high-profile appointment in a week, having just poached Apple car project leader Doug Field.
Mike Amend / LinkedIn
Ford pulls out of IndiaFord is putting an end to its long and costly attempt to build a presence in India, and will shut down all operations in the country and take a hit of around $2 billion.
Twenty five years after entering the India market in an effort to compete in the massive auto-market and take on dominant low-cost Asian rivals like Suzuki (6785) and Hyundai (005380), Ford has decided to take its $2 billion in losses and put an end to its New Delhi operations. In the past, India was expected to be the world's third-largest car market by 2020 after China and the United States, but it turns out the market had struggled to grow. Ford isn't alone in its struggle to get a grip on the market – General Motors (GM) stopped selling cars in India in 2017. Ford India head Anurag Mehrotra said:
Despite (our) efforts, we have not been able to find a sustainable path forward to long-term profitability.
Prices ended Thursday down 2%.
Ford goes trophy huntingFord has been on the hunt for a strong team to push its ambitious EV turnaround plan, and it’s poached one of the best: Doug Field, former leader of Apple’s secret car project and a Tesla veteran.
In May, Ford CEO Jim Farley introduced his new Ford+ Turnaround Plan which aims to see electric vehicles make up 40% of all global sales by 2030 and increase EV investment to $30 billion by 2025. The company is on the hunt for an all-star cast to headline its transformation, and this week poached Doug Field, previously senior vice president of engineering at Tesla and until recently one of the key leads on Apple’s (AAPL) top secret car project. Field will help Ford develop stronger digital services, which is a key tenet of the automakers turnaround plan, and will also delve into car and truck design. Farley said about the company’s new hire:
This is a watershed moment for our company. The entire customer experience of the future goes through the embedded system. His talent and commitment to innovation that improves customers’ lives will be invaluable as we build out our Ford+ plan to deliver awesome products, always-on customer relationships and ever-improving user experiences.
Ford’s electrified vehicles set a new August sales record this year. EV sales were up over 67% from the same period last year to a total of 8,756 vehicles, and EV’s are bringing in new customers at an unprecedented rate. Ford received such high demand for its electric F-150 that it reportedly doubled its production target on the truck.
F-150 / Ford
A sad August for automakersAs the global chip shortage rages on, Ford is feeling the pain – following a string of factory shutdowns over the summer, Ford’s August sales plunged by a third from the same period a year before. Total U.S. sales were 124,176 vehicles, down 33.1% from a year ago. However, every cloud has a silver lining and electric vehicles sales jumped by two-thirds to a new August record, up 67% to 8,756 vehicles.
Prices opened in the red on Friday morning.
Ford pauses Bronco ordersIn the midst of multiple-factory shut down, Ford subtly stops taking orders for its Ford Bronco.
Ford has recently had to shut downproduction of some of its key factories as a response to the ever-continuing global chip shortage, and clearly the end isn’t yet in sight. The firm just gave us a subtle hint that things have taken another turn for the worse by pausing all online orders for the Ford Bronco. Orders are expecting to come back online in October.
Ford’s chip crisis continuesThe effects of the global chip crisis are only worsening, and Ford once again cuts vehicle production, meaning the automaker has lost around 50% of its Q2 planned production.
Ford has been hit especially hard by the global chip shortage, facing factory shutdowns left right and center in the wake of a lack of supply. Despite accelerating its electric vehicle production earlier this week, Ford has been forced to cut production of its top F-150 pickup and two other popular cars, so it looks like its EV segment is getting what little resources the company has. Ford said in a statement:
Our teams continue making the most of our available semiconductor allocation, finding unique solutions to provide as many high-quality vehicles as possible to our dealers and customers.
Ford takes EV pickup production up a gearFord is doubling its production target for its F-150 Lightning after seeing pre-launch demand kick it up a gear.
Despite last week having to close its Kansas City plant in the face of the worsening semiconductor chip crisis, Ford has received such high demand for its electric F-150 that it is reportedly doubling its production target on the truck. The leading auto-maker plans to spend an additional $850 million to its 2022 launch target, facing heightening demand for the electric version of the F-150, which has been America’s best selling vehicle for nearly 40 years. Ford is aiming to produce over 80,000 F-150 Lightning vehicles annually by 2024, double its original target of 40,000. The company said:
We are excited with customer demand for the F-150 Lightning and already have 120,000 customer reservations, and we will continue to look for ways to break constraints and meet customer demand.
Automakers are racing to make the move to electric vehicles as they face increasing governmental pressure to cut down on vehicle emissions – President Joe Biden has made electric vehicles a key tenant of his $2 trillion infrastructure bill, injecting around $174 billion into boosting EV production, infrastructure and sales.
Ford closed the day up 1.27%.
All-Electric F-150 Lightning Pro / Ford
The chip shortage strikes againIt might be the second-largest vehicle maker in the U.S., but Ford is still battling with the effects of the global chip shortage, forcing it to temporarily close production at a U.S. truck plant.
No one seems to have any real idea how much longer the global semiconductor chip shortage will go on for, but one thing is for sure – carmakers are struggling, and Ford is caught in the crosshairs. The firm was forced to temporarily close its Kansas City plant this week (the location where its best-selling F-150 pickup trucks are manufactured) because of the ongoing COVID-19 closures in Malaysia exacerbating the chip shortage.
This is not the first time that Ford has had to close down a plant, and the closure is expected to last at least a week.
Ford gets into a spat with General MotorsAfter getting hit with a trademark lawsuit from General Motors over its “BlueCruise” highway driving system, Ford has responded with a request for the case to be dismissed.
After Ford launched its very own hands-free highway driving tech and called it “BlueCruise”, automaker competitor General Motors (GM) spoke out against the name, saying it was too similar to its own Super Cruise system. On July 24, GM (GM) sued Ford for potentially infringing on its Super Cruise trademark, and it basically turned into a discussion about whether the word “cruise” can be trademarked to that extent.
While GM had hoped to resolve the trademark infringement matter with Ford amicably, we were left with no choice but to vigorously defend our brands and protect the equity our products and technology have earned over several years in the market. Ford knew what it was doing. (Its) decision to rebrand by using a core mark used by GM and Cruise will inevitably cause confusion,
GM said at the time.
Ford is having none of it, standing by its new name and asking the judge to dismiss the lawsuit entirely, calling it “meritless and frivolous” and asking for GM’s (GM) trademark on the word “cruise” to be removed.
Drivers for decades have understood what cruise control is, every automaker offers it, and 'cruise' is a common shorthand for the capability. That’s why BlueCruise was chosen as the name for the Blue Oval’s next evolution of Ford’s Intelligent Adaptive Cruise Control,
said Ford as a defense.
Ford revs up with Q2 profitFord stock lifted 3.82% on Thursday after surprising investors with a quarterly profit as car sales overshadow supply constraints, although it lost most of the gains again on Friday.
Shares of Ford got a bump up from its pleasing second quarter results, which raised the outlook for the rest of the year and showed a surprise profit as demand for its cars soars. The automaker reported earnings per share of $0.13 on revenue of $24.13 billion, compared to the $0.03 loss and $24.25 billion in revenue that analysts were expecting. Revenue came in just under expectations due to the semiconductor shortage pressure, which continues to reign in production capacity – the company lost production of around 700,000 vehicles in the quarter. That makes up around 17% of its production, much less than the 50% that analysts expected.
The numbers are even more impressive when you consider that one of the Japanese factories it sources a lot of its semiconductor chips from was hit by a fire in March. Ford has managed to make the best of a bad situation, and raised the price of a lot of its scarcer cars: apparently a big part of the reason the automaker was able to turn a profit this quarter. As the cherry on top, Ford thinks that the shortage is on the way to easing.
We are now spring-loaded for growth in the second half and beyond because of those red-hot products, pent-up demand and improving chip supply,
CEO Jim Farley told analysts.
Ford raised its full year guidance by around $3.5 billion to up to $10 billion, and sales volume is expected to rise by around 30% in the second half of the year.
A robotaxi revolution?Ford is making good use of its shiny new EV range, joining its partner Argo AI to start a Robotaxi service with rideshare giant Lyft across major U.S. cities next year.
Automaker Ford is teaming up with self-driving software start-up Argo AI and industry leading ride-hailing company Lyft (LYFT) to create, you guessed it, a self-driving ride-hailing app. The best of all worlds – although to quell any fears about getting into a robot car, there will be safety drivers in the cars for at least the next two years. The trailblazing trio will launch at least 1,000 of the Robotaxis on Lyft’s (LYFT) network over the next five years, starting with Austin and Miami. Ford and Argo both have a huge fleet of test vehicles in those areas, but the plan is to expand into all major U.S. cities from 2023 onwards.
The collab will be the first time a carmaker, a self-driving software developer and a ride-hailing company have joined forces, and it could be the key to figuring out how to finally make a commercially viable business from Robotaxis. Lyft (LYFT) abandoned its own Robotaxi dreams when it sold its self-driving tech segment to Toyota, but a self-driving taxi has long been the holy grail for the industry.
Lyft jumped 5.33% on Wednesday on the news, while Ford rose a modest 2.01%.
Ford sees June deliveries slipFord is up 69% YTD and is making impressive headway in the EV market, but can it keep up the gains as it battles the global chip shortage?
Legacy stock Ford, which has been controlled by the Ford family since Henry first founded the firm way back in 1903, has been one of the top stocks to watch this year. It kicked off 2021 with a brand new start, a corporate redesign, and big plans to make its mark on the EV and clean energy market. And so far, things have been going pretty well.
The stock started the year off at $8.81, and since then the firm has released a whole bunch of new technologies in the EV space that have pushed the price up to its Friday close of $14.93. In May, Ford said it was expecting 40% of its global sales to be electric by 2030, and announced plans to increase its EV investment to $30 billion by 2025. However, things haven't been running as smoothly lately as the global chip shortage takes its toll, casting doubts over whether Ford will be able to keep up with its stellar 2021 performance.
Last week, the automaker was forced to significantly cut its North American vehicle production: shutting down or reducing production at eight plants, six of which were in the U.S., for at least the month of July and possibly going into August. The cuts were the latest in a string of shutdowns for the company, which earlier this year said it was expecting to lose about 50% of vehicle production in Q2 because of the chip shortage issue, adding up a loss of around $2.5 billion in earnings.
On Friday, its latest June delivery numbers gave a glimpse into that reality. Second quarter sales were below expectations at 475,327 vehicles, up only 9.6% from the same period a year ago when the country was locked down and auto dealers were shut, while sales for the month of June were down by just under 30%.
There is a silver lining though – Ford has seen reservations for its electric F-150 Lightning pickup surpass 10,000 since it made its debut in May.
Ford keeps flyingFord flew 7% after it unveiling a new compact pickup truck and some impressive sales numbers - the stock is up 35% since the start of May.
Last week, Ford continued its winning streak with a 7% jump that took the stock to its highest price since 2016, on the back of a JP Morgan upgrade and the release of a new vehicle. Prices are now trading at around the $15 mark – highs that investors haven’t seen since May 2016. The new entry-level truck is called Maverick, and is part of the automaker’s plan to offer pickups at a variety of prices as the market becomes more competitive.
Another piece of good news came in the form of a JP Morgan analyst upgrade, probably thanks to the sales numbers released the day before. Ford reported last week that its U.S. sales rose in May despite production issues and chip shortages that have been plaguing automakers. Sales were up 4.1% for the month, a welcome improvement from the sharp decline in May 2020 as COVID ran rampant. Whilst beating last year's numbers wasn't exactly difficult, it was still a surprise given the production challenges that the company has had to face recently – interruptions at key factories in the U.S. coupled with strong consumer demand has left Ford, and indeed a lot of others, in the doldrums as inventories are depleted and the global chip shortage continues.
Ford may not see the same degree of improvement in semiconductor availability in 2Q as GM but we believe it may see some, including after it was reported earlier this week that a fire-damaged semiconductor plant in Japan to which it is disproportionately exposed has nearly returned to full capacity,
the JP Morgan analyst, Ryan Brinkman, said about the stock.
Investor day excitmentFord is up over 12% in two days to close at its highest price since July 2016 after its investor day reveals plans to boost electric vehicle investment to $30 billion by 2025.
Shares of Ford jumped up almost 9% on Wednesday on the back of CEO Jim Farley’s first investor day, where shareholders got a look at the company’s impressive new “Ford+'' initiative, which is aimed specifically at increasing profits and expanding into high tech segments. The car maker is also hugely investing in its EV segment, which has recently got a lot of attention for the new electric version of its most popular pickup last week. A part of the new Ford+ plan is for electric vehicles to make up nearly half of all global sales by 2030, and Ford will increase its investment into EVs to over $30 billion by 2025.
This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T, and we’re grabbing it with both hands,
said Ford CEO Jim Farley.
Promising partnershipFord stock is absolutely cruising, jumping almost 7% on Friday to close at its highest price in a decade after the automaker announced a new partnership with a South Korean battery maker to support the rollout of the new EV pickup it announced last week.
Ford stock got a boost earlier last week after revealing its brand new Electric Ford F-150 Lightning pickup; and prices shot up another 6.73% on May 21 with the announcement that the rollout would be supported by a new deal with South Korean battery maker SK Innovation. The pair have agreed to form a battery joint venture in the U.S., and have signed a deal to form a new venture together called BlueOvalSK.
Finalized details are likely to emerge later this summer, but so far the plan is for BlueOvalSK to produce around 60 gigawatt-hours (GWh) annually in traction battery cells and array modules – which sounds kinda techy, but is important because Ford’s global EV plan demands a capacity of 240 GWh by 2030, which is when the company hopes to be all-electric. So this deal is a pretty important step in the right direction.
This MoU is just the start; it’s a key part of our plan to vertically integrate key capabilities that will differentiate Ford far into the future,
said Jim Farley, Ford president and CEO.
Ford gets Tesla shaking in its bootsThere was once a time when Tesla had a monopoly on the EV space, but competitors like Ford are starting to take back some of that territory. The automaker reveals its new electric pickup ahead of schedule, and Prez Biden is the first to give it a whirl.
Ford gave the world (well, Biden) a sneak peek at its highly anticipated new electric F-150 Lightning pickup earlier than anyone was expecting, during a presidential tour of the Michigan plant that is producing the car. The Ford F-150 has been the best-selling truck in the U.S. for over forty years, so releasing an electric version isn’t just a big deal for Ford - it’s a big deal for everyone. And clearly the new vehicle already has a fan in Biden, who apparently joked that he’d like to lose secret service and take it to the track. He also reinforced his support for the adoption of EVs, and suggested switching government vehicles to EVs such as the F-150.
The future of the auto industry is electric, there’s no turning back
Biden said during a speech at the plant.
At the rate things are going, that’s looking pretty possible – global EV sales are expected to double in 2021 alone. Currently, electric vehicles only make up only about 3% of global auto sales, but some analysts think that electrics could outsell gas cars by 2040.
One of the first to predict this was obviously Elon Musk’s Tesla, which until recently had a clear lead over its competitors in this space. One teardown of the Model 3 last year estimated Tesla tech to be six years ahead of VW and Toyota. However, Tesla's share of the U.S. electric-car market fell from 81% to 69% in February 2021; a key reason for which was the boom in sales for Ford’s electric Mustang Mach-E.
It’s not just traditional automakers that are making their mark either; smaller dedicated electric vehicle brands like Lucid Motors and Fisker are starting to fight for (and win) their own piece of the market. Lucid Motors was founded with the aim of redefining luxury EVs, competing directly with Tesla’s Model S with its Lucid Air. When you compare the two vehicles, Lucid does a pretty good job of keeping up, scoring higher in five out of six categories (Lucid’s CEO was the chief engineer of the Model S at Tesla, so they’ve got a bit of an inside advantage). Last week, the company gave an analyst day presentation as it cruised towards completing its merger with SPAC Churchill Capital IV in order to go public. Shares of Churchill had been trading downwards for a few weeks, but this update managed to send them back on an uphill journey. Lucid has already sold out all of its $170,000 Air Sedans and total reservations have topped 9,000. In its latest update, Lucid pushed back the close of its SPAC merger, which we can now expect to complete early in Q3 – so watch this space, as we might see some big things coming.
New player Fisker is at the battle too, winning with a strong earnings report and a new delivery agreement with a U.K. based electric car subscription service. This week the firm released its Q1 earnings, which show some promising milestones – although nothing is on sale yet, its first product, called Ocean, is still expected in 2022, and reservations for the car have jumped to 16,000 from 12,000 in the first quarter. Its second car will be produced by well-known Apple supplier Foxconn, and is expected in 2023.
You can almost hear Tesla shaking in its wheels.
Photo: Gage Skidmore / Flickr
Cautious recoveryFord is making a cautious recovery this week after the shock announcement in its Q1 earnings of an expected 50% reduction in Q2 production levels sent the share price plummeting by almost 10% on April 29. The stock recovered by around 2.49% the following day however, and has been creeping gradually back up this week.
Ford reported earnings last week with better than expected profits, but it's clear that the global semiconductor shortage is starting to hit where it hurts. The automaker reported adjusted earnings of 89 cents per share on revenue of $33.5 billion and sales of $36.2 billion, versus expectations of 21 cents earnings per share on $32.23 billion revenue.
But even in the face of such a strong earnings beat, there was plenty for investors to be concerned about. The semiconductor shortage has hit the company’s free cash flow, increasing raw material costs and making life pretty hard for automakers, who have had to shutter factories around the globe for varying periods of time – leading to tight vehicle inventories on dealer lots.
Ford burned through around $400 million in Q1 because it finished the period with a load of unfinished cars. Its earnings report warned that the global chip shortage could slash its Q2 production by up to 50% before potentially improving toward the end of the year. Ford updated its full year guidance, which was set at between $8 billion and $9 billion in adjusted pretax profits in February, but has now been adjusted to be between $5.5 billion and $6.5 billion, with adjusted free cash flow for 2021 expected to be between $500 million and $1.5 billion. The semiconductor shortage will cost the company around $2.5 billion in 2021, and is expected to cost the global auto industry $60.6 billion in revenue.
Luckily, lower supplies have also led to higher profits per vehicle, so hopefully the company can continue to perform despite the shortage.