24/7 Wall St. Key Points:

• While production targets have been lowered, Ford Motor Co. (NYSE: F) highlights its operational and financial inefficiencies as its EV business suffers increasing losses with each F-150 Lightning sold.
• With Ford dependent on hefty U.S. tariffs to stay competitive in the home market, Chinese EVs, priced as low as $18,000, seriously jeopardize the company’s market posture.
• Further compromising the long-term viability of the EV market are more general problems including EV charging infrastructure limitations, cold weather performance, and new options such natural gas-powered vehicles.
• Are you on track to retire, or are you behind? Click here to take a free quiz and see for yourself. (sponsored)

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Transcript:

[00:00:04] Douglas McIntyre: The Ford Motor family is still trying to kill Ford Motor Company.

[00:00:08] Lee Jackson: They

[00:00:09] Lee Jackson: They’re doing a good job.

[00:00:10] Douglas McIntyre: They’re doing a good job. So I’m going to give you a number. they want to be the EV leader in the United States. So their flagship EV is the F 150 Lightning. It’s named after the their best selling vehicle, which is the F 150 gas powered.

[00:00:27] Lee Jackson: heard of that.

[00:00:28] Douglas McIntyre: Right. So in the fourth quarter, they sold 10, 703 of these. Which was down 10%. Ford said they were going to spend 3 billion, 30, 30 billion on EVs. I don’t know how much they’ve spent yet, but it’s a lot in the first quarter of this year is they lost a hundred thousand dollars for every EV they sold. Now they’ve dialed back

[00:00:56] Lee Jackson: That’s not good.

[00:00:57] Douglas McIntyre: They’d be able to produce 600, 000 a year. So the stock price very soon, I think will be where it was. When the current CEO Farley took over, so he’ll have been there that whole time

[00:01:10] Douglas McIntyre: and the

[00:01:11] Lee Jackson: Right.

[00:01:12] Douglas McIntyre: the S and P is probably up 100 percent or something, but it’s just, it’s like the Keystone cops.

[00:01:18] Douglas McIntyre: It just gets, keeps getting worse and worse and worse.

[00:01:24] Lee Jackson: I don’t know how they managed to do this. and it’s, and it’s really odd because it was like a banner year for GM. The GM EV sales were better. you know, other EV sales have picked up a little bit, you know, near the end of the year. So I don’t know how they continue to do this.

[00:01:44] Douglas McIntyre: Neither do I. Anyway, I think it’s always important to talk a little bit about Ford. Obviously, the stock price is horrible. One of the problems, I think, as you know, is that it’s one of these companies that has A and B shares. the Ford company doesn’t own a huge amount of the common that you and I can own, but they own a very large amount of the, you know, special, special voting shares. And so they’ve, they’ve got those. Now, I also find fascinating, Farley went to China he saw how great all the Chinese EVs were, and he said, this is an existential dilemma for us, which implies that if he comes, if those Chinese cars, they take the tariffs off, which are about a hundred percent now, and they can bring them into the United States. Ford Motor Company goes out of business. I mean, at that point you’ll have, you can buy EV, Chinese EVs that are apparently very good cars, according to Car and Driver. For 18, 000. So I can now get an EV. And I think, you know, the Mustang Mach E, which is the least expensive Ford is, I’m going to say it’s 35, 000 40, 000.

[00:03:00] Douglas McIntyre: If

[00:03:00] Douglas McIntyre: nice one, it’s more expensive. So Ford now lives in what I call the Tariff fortress of the United States. Okay. under the administration that’s leaving their 100 percent tariffs on these cars, my guess is that’s not going to change, which means that the U. S. car companies, particularly Ford, are being kept in business the U.

[00:03:27] Douglas McIntyre: S. government.

[00:03:29] Lee Jackson: Yeah, well, I don’t think Trump’s going to lift Chinese tariffs on EVs anytime soon, but I think you’re right. I mean, if they figure out a way to get those in here and they’re competitive and they they work and I don’t know, I think the biggest problem with EVs is just that they’re electric vehicles and there’s this huge cold front sweeping through the nation here in Mississippi.

[00:03:55] Lee Jackson: Mississippi. Now, granted, we’re in northern Mississippi up near Memphis, but I mean, it was 28 degrees today. So, I think in a lot of places, you know, where it gets, it’s getting cold, then you’re going to start to see the failures again. Then you’re going to start to see the chargers blow up again. And I dunno, I just, I get the sense the more I’ve, I watched the industry that it’s just not going to catch on.

[00:04:17] Lee Jackson: People don’t trust it.

[00:04:19] Douglas McIntyre: So your your point of view is that people are unhappy me. charging time. are unhappy with charging stations. Apparently now there are lines that

[00:04:29] Douglas McIntyre: So people are waiting in lines to get their EVs charged, which I just think is, it’s so awesome. At a gas station, I can drive in. And seven minutes later, I can drive out with a full tank of gas. There’s now rumors, and I think you saw this, I don’t think they’re rumors, that if you’re in a low lying area near saltwater, and the saltwater hits your engine, it sets it on fire. So you may be right, it may be that tariffs don’t save the EV business, it may be that the EV business has killed itself.

[00:05:02] Lee Jackson: I don’t, I don’t think it’ll possibly survive as it stands now because, hey, you know, the technology is, I mean, again, you know, Tesla (NASDAQ: TSLA) sells a lot of them. There’s no, there’s no doubting that. But, their numbers this time weren’t as good as expected. And it makes almost makes you wonder, are we starting to hit like kind of a saturation point?

[00:05:24] Lee Jackson: Where this isn’t the kind of car you can go out and buy a new one every five years unless you’re extremely wealthy So, I don’t know. I think the industry’s in big trouble period because one of the things I read recently and and and this is this is interesting is is that Natural gas powered vehicles are starting to be huge in China.

[00:05:45] Lee Jackson: What if they go to Nat gas power? Ford,

[00:05:53] Douglas McIntyre: invest money in EVs and find out that natural, you know what I’m saying, we’re going to spend

[00:05:58] Lee Jackson: Yeah.

[00:05:59] Douglas McIntyre: on EVs, but then we find out that people want cars powered by something else, not gas

[00:06:05] Lee Jackson: Or, or whatever, but I mean, come on, this is the same company that fired Lee Iacocca. And so they have a history of doing stupid things and, you know, bringing in this CEO is probably just setting the table for Bill Ford to get a new CEO.

[00:06:19] Douglas McIntyre: It is, it is.

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