Ford’s Situation Gets Worse as Shares Collapse

By Douglas A. McIntyre Published Apr 25, 8:30AM EDT

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Ford’s Situation Gets Worse as Shares Collapse — © gopixa / iStock Editorial via Getty Images

Ford looked like the legacy car company stock to beat earlier this year. That has ended over the past few months. Shares are down by 27% this year, while the stock of the company it is chasing, Tesla, has retreated only 5%. That makes the gulf between their market caps even bigger. Ford’s is $61 billion. Tesla’s is over $1 trillion.
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What happened? Tesla proved it could move through supply chain issues that have crippled the industry. In the most recent quarter, automotive income rose 87% to $16.7 billion. Net income for the entire company rose 658% to $3.3 billion. Total deliveries rose 68% to 310,000.
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In Ford’s most recent quarter, revenue rose 5% to $37.7 billion and it made $12.3 billion. It had lost money in the same period a year ago. To some extent, these numbers were not important. Ford’s stock run-up was based on the growing assumption that it was the legacy car company with the best chance to move quickly into the electric vehicle (EV) business.
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The optimism about Ford was largely built on the electric version (F-150 Lightning) of the best-selling vehicle in America for over four decades (Ford F-Series). Now, there are worries the ability to fulfill demand will slow due to supply chain problems. This raises the question of whether people who have made reservations to buy the pickup will wait.
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How much is at stake based on the Lightning launch? Ford’s executive board chair, who runs the company even though he does not have the chief executive title, recently told The New York Times, “If this launch doesn’t go well, we can tarnish the entire franchise.” While some of the worries could be about product quality, a great deal has to do with the production pace.

Ford has gone from being a hot stock to one that reflects the skepticism about its EV future.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.