In the race to become Detroit’s top electric vehicle maker, Ford has lagged behind crosstown rival General Motors.
Under new boss Jim Farley, the leaderboard is changing. America’s number two carmaker announced plans this week to invest in three battery factories and an electric truck plant in the US. The $7bn planned spending would be the single biggest manufacturing investment in Ford’s 118-year history. It comes just months after the company said it planned to spend $30bn on electric vehicles through to 2025. The message is clear: Ford will be an EV laggard no more.
Yet the electric dream is a difficult one to achieve. Although sales of electric vehicles are forecast to reach 31m units a year by 2030, according to Deloitte, gasoline-powered cars remain Ford’s core business for now.
At the moment, the only pure electric product Ford has on the market is the Mustang Mach-E SUV. It sold only 17,277 units of the model in the first eight months of this year. That represents just 1.4 per cent of total vehicles the company sold during the period. Tesla, by contrast, produced and delivered close to half a million vehicles last year.
A big test for Ford will come next spring when it launches the F-150 Lightning — the electrified version of its popular pick-up truck. For traditional carmakers, no EV future could be secured without making electric pick-up trucks that Americans will want to buy. On this front, Ford will have plenty of competition. GM has its GMC Hummer in the wings. Upstarts Rivian (which Ford has a stake in), Lordstown Motors and Tesla are preparing their own entries.
Shares of Ford have more than doubled since Farley took the helm almost a year ago, topping GM’s 81 per cent rise over the period. It no longer trades at a discount to GM on a forward earnings basis. But at just 9 times expected earnings — compared with Tesla’s 123 times — Ford remains a cheap way in to the flourishing electric vehicle market.
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