Ford Shares Plunge to Near 2-Year Low

By Douglas A. McIntyre Published Aug 13, 6:45AM EDT

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Ford Shares Plunge to Near 2-Year Low — © solarseven / iStock via Getty Images

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Ford Motor Co. (NYSE: F | F Price Prediction) stock is unlikely to recover the ground it has lost over the past two years.
That is due in part to poor electric vehicle (EV) unit sales.
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Shares of America’s number two car company, Ford Motor Co. (NYSE: F), lost 2.4% to $9.86, barely better than its two-year low. The stock is down 38% over the past two years, while the S&P 500 is 25% higher. The share price of Ford’s cross-town rival, General Motors Co. (NYSE: GM), has gained 9% in that time.

What Happened?

Electric vehicles are a drag on Ford.

Ford had the opportunity to become the U.S. electric vehicle (EV) unit sales winner based on the potential success of the Mustang Mach-E and F-150 Lightning, which carried the names of the company’s most iconic brands. The F-150 full-size pickup has been the best-selling vehicle in America for over four decades. Ford began to produce the Mustang in 1964, 60 years ago. The brand equity built by each is extraordinary; the company needs to be concerned that the EV versions tarnish that.

What occurred is that Ford has never sold many EVs. Sales of the electric versions of the Mustang and F-150 are only a few thousand a month in the United States, compared to the total monthly new car sales of about 170,000. This is a disaster, and Ford may not recover from it at all.

In September 2021, CEO Jim Farley said Ford would have invested over $30 billion in EVs through the end of 2025. He also said in 2023 that it would produce 600,000 EVs annually in 2024. Recently, the company returned to higher production levels of profitable products like its gasoline-powered Super Duty pickup. Management realized that, while it lost over $1 billion a quarter on its EV business, it needed legacy gasoline-powered product sales to be strong for the company to be profitable.

No one will be able to say for sure what undermines Ford’s EV plans. Some say it made EVs that were not as good as those from Tesla Inc. (NASDAQ: TSLA). Others say Ford changed the prices of its EVs too many times, and consumers have become confused and unwilling to pay a premium for EVs compared to gasoline-powered models. Yet others will say the EV market became crowded as the world’s major car companies battled for U.S. market share.

Ford’s stock is unlikely to recover most of the ground it has lost over the past two years.

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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.