Ford’s (NYSE: F) stock has been down since its last earnings announcement, part of a long-term trend. Shares are down 20% in two years, while the S&P is up 50% in that period. Shares in crosstown rival General Motors are up 37%.
Ford’s problems center around two issues. The first is its failure in the EV market after large investments and forecasts of tremendous success. The other is quality and warranty issues, which have cost hundreds of millions of dollars and undermined earnings.
In Ford’s two most recent quarters, warranty costs were specifically mentioned as part of its financials. When Ford announced earnings in July, The Detroit Free Press noted, “Recurring quality problems have driven up Ford’s warranty costs for years, but an $800 million spike in the second quarter caught investors by surprise.”
The National Highway Traffic Safety Administration recently hit Ford with a $165 million penalty because it “…found the company failed to recall vehicles with defective rearview cameras in a timely manner and failed to provide accurate and complete recall information…”
Ford said it would invest $30 billion to become an EV industry leader. Instead, it has lost so much money that it lost almost $150,000 for each EV it sold earlier this year. It has cut production of its flagship EV, the F-150 Lightning, and sharply cut plans to produce hundreds of thousands of EVs per year.
Ford has to fix at least two significant problems to get its stock to start a recovery.
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.