EVs, Especially From China, Could Ruin Ford Propects

By Douglas A. McIntyre Published Jul 7, 7:53AM EDT

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EVs, Especially From China, Could Ruin Ford Propects — © Public Domain / Wikimedia Commons

Ford (NYSE: F | F Price Prediction) has had a tough year, at least according to investors. Its stock is up only 5% this year. Over the same period, the S&P 500 is 17% higher, and the shares of rival GM (NYSE: GM) have risen 30%. However, Ford’s sales have been strong, especially in the US. While GM's stock has surged, Ford has been left behind.

One challenge Ford faces is its performance in the world’s largest car market, China. According to CNBC, Ford sales there dropped 32% from 2018 to 2022. By most accounts, they fell again last year. It is hard for a global car company to prosper without some success in China.

Ford lost a massive battle with the UAW. It will eat into profits considerably. Ford said the deal would cost $8.8 billion over the life of the new contract.

However, Ford’s biggest problem may be EVs. CEO Jim Farley recently said without success in the segment, “We Will Shink,” at least in North America.

Ford boasted that its US EV sales rose 71.8% in the first half to 44,180. However, that was only 4.2% of the total of 1,044,133. It will need to do substantially better in a market where Tesla (NASDAQ: TSLA) has a share of almost 50% and one that every major car company in the world wants to conquer.

Ford’s long-term challenge in the US is one that every significant car company faces. If Chinese EV companies can enter the market without 100% tariffs, they could badly damage the prospects of Ford and every other manufacturer pushing for large sales in America.

Jim Farley knows he has a huge challenge.

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.