Over two years, Ford’s (NYSE: F) stock has gone down 38% while the S&P 500 has gone up 25%. The period was supposed to be when Ford became the clear US EV sales winner riding on the success of the Mustang Mach-E and Ford F-150 Lighting, both of which carried the names of the company’s most iconic brands.
What happened is Ford has never sold many EVs. Sales of the EV versions of the Mustang and F-150 are only a few thousand a month in the US, compared to the total monthly new car sales of about 170,000. Ford has been a disaster.
In September 2021, CEO Jim Farley said Ford would have invested over $30 billion in EVs through the end of 2025. He also said in 2023 that Ford would produce 600,000 EVs per year in 2024. Recently, Ford returned to higher production levels of very profitable products like its gas-powered Super Duty pickup. Management realized that, while it lost over $1 billion a quarter on its EV business, it needed legacy product sales for the company to be profitable.
No one will be able to say for sure what undermines Ford’s EV plans. Some say that Ford made EVs that were not as good as Teslas (NASDAQ: TSLA). Others say Ford changed the prices of its EVs too many times, and consumers have become confused and unwilling to pay a premium for EVs compared to gas-powered models. Yet others will say the EV market became crowded as the world’s major car companies battled for US market share.
What is certain is that Ford’s failure in the EV sector is part of the collapse of its share price.
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