Ford Motor Co. (NYSE: F) stock has traded in a range of $8.44 to $11.97 in the past 52 weeks. This is after reaching $24 in early 2022. It is range-bound now, and its most likely next move is downward.
Ford suffers from three serious problems, none of which it is likely to address positively. It lost billions of dollars moving into electric vehicles (EVs) in 2021, when it said its investment in the industry would be $30 billion. The products introduced included a new electric Mustang and F-150, which sold only several thousand units per month. The decision was a catastrophe.
Ford also has the worst warranty expenses in the industry. It has taken billions of dollars in write-offs because of recalls due to low-quality manufacturing. Quarter after quarter, Ford says it will get a handle on the problem. Quarter after quarter, it does not. It has set industry records for the number of recalls in a year. It is likely to set a new record in 2025.
Ford’s Final Hurdle
Ford’s final hurdle may be the most dangerous. Management has publicly said on many occasions that China’s EVs are much better than any made in the United States. Ford views this as an existential threat. It will restart its EV push with a new electric pickup truck and what it says is a revolutionary manufacturing process. Ford CEO Jim Farley said that there is no guarantee this will be successful. The company’s manufacturing record makes the risk even greater. How can a company that cannot build gasoline-powered cars successfully do it with a new and complex EV manufacturing process?
Ford’s EV effort pits it against the Chinese, Tesla, and every major legacy car company in the world. Companies from Hyundai to BMW are rushing their own EVs to the market. It may be the largest rush toward a new model in the car industry’s history, which dates back to the early 1900s.
Treading Water
Ford stock does have one attraction. It has a forward yield of 5.24%, which seems safe for now.
There is one thing going for Ford that could keep its stock near current levels. However, it will not push shares higher. The company is a leader in gasoline-powered vehicle sales in the U.S. EV sales were less than 10% of all new car sales in the U.S. in the first quarter of this year. That number is growing more slowly than expected, contrary to industry optimism, which expected the figure would be 50% by the end of the decade. Ford has an earnings runway because of how slowly EV sales are growing.
Ford does not have much of a long-term future. For now, however, the stock may be able to tread water.
Ford Threatens Investors With Another Family Member
Top Gaining Stocks
Top Losing Stocks