Ford Shares Beaten Down By EV Failure

By Douglas A. McIntyre Published Jan 27, 7:34AM EST

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Ford Shares Beaten Down By EV Failure — © 188974314@N02 / Flickr

Ford will announce earnings soon, and investors hope the No.2 American car maker will offer strong guidance. A look back at 2023 and early 2024 shows little reason for optimism about its current prospects.

Ford’s stock is down 12% in the last year, while the S&P 500 is 21% higher. Rival Toyota, which often sells more cars in the US than Ford, has posted a 35% jump in its shares over the same period.

Ford’s primary fumble is its EV business. A UAW strike and contract made its problems much worse.

Ford told investors its driving into the EV business would alter the company’s future. Gas-powered cars were moving toward a sunset due primarily to their effects on the environment. The Biden Administration and European countries announced aggressive EV market share goals. On April 17, 2023, the Administration said its goal was to have 50% of all new cars sold in the US powered by electric engines.

Among its most ambitious plans was announced on September 7, 2021. Ford would build massive EV facilities in Tennessee and Kentucky via an $11.4 billion investment. Fast forward to October 28, 2023. In a change of heart, Ford said it would delay $12 billion in EV investments across the company. Its market intelligence must have been wrong about how many people would buy EVs in America. CFO John Lawler said, “We are, though, looking at the pace of capacity we’re putting in place. We are going to push out some of that investment.”

Ford must not have seen its market share faltering fast as the EV market advance moved too slowly. Even Tesla’s earnings and forecast for 2024 were damaged by slow demand. Ford’s big EV product launches, which the Ford F-150 Lightning led, fell apart. It sold 750,789 of the big pickups last year. Lightning sales were a mere 24,165.

The UAW contract hurt Ford badly and compromised its ability to invest in new products. It will cost Ford $8.8 billion from when it became effective until April 2028.

Ford shareholders should consider themselves lucky if the stock holds its own this year.

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.