Ford Motor Shifts Electric Vehicle Strategy, Stock Rises on Wall Street Applause
Ford Motor Shifts Electric Vehicle Strategy, Stock Rises
Ford Motor announced a shift in its electric vehicle (EV) strategy on Wednesday, aiming to deliver profitable and capital-efficient growth. The company plans to offer a wider range of electrification options at lower prices and increase ranges, a move that has been well-received on Wall Street.
One notable change in Ford’s plan is the delay in production of its all-electric pickup truck to the second half of 2027, pushing back the initial production timeline. Additionally, the company has decided to cancel plans for its three-row sports utility vehicle (SUV) in favor of prioritizing hybrid models and electric commercial vehicles.
These adjustments will come at a cost, as Ford expects to incur a special non-cash charge of about $400 million and additional expenses and cash expenditures of up to $1.5 billion. However, the automaker believes these changes are necessary to align with its goal of achieving positive earnings before interest and taxes (EBIT) within the first 12 months of launch for all new models.
Ford CEO Jim Farley emphasized the importance of competitive battery costs in making electric vehicles more affordable. The company plans to realign its U.S. battery sourcing to reduce costs and increase capacity for current and future production.
While some analysts remain cautious about Ford’s EV and software strategy, others are more optimistic. Financial services firm BofA Securities, for example, has a Buy rating and $20 price target on Ford stock. The company’s executives have reiterated their commitment to maintaining their capital allocation strategy and returning a significant portion of free cash flow to shareholders.
Overall, Ford’s shift in its EV strategy has generated positive momentum on Wall Street, with the company’s stock seeing an increase in intraday trading. Investors will be watching closely to see how these changes impact Ford’s long-term growth and profitability.
