Ford Is Building the Wrong Car

By Douglas A. McIntyre Published Oct 2, 9:15AM EDT

Quick Read

Ford Motor Co. (NYSE: F) CEO Jim Farley says the EV market will be “way smaller than we thought.”
The company also recently announced its Universal EV Platform.
Management needs to get its story straight and sell it to shareholders.

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Ford Is Building the Wrong Car — © AaronAmat / iStock via Getty Images

Ford Motor Co. (NYSE: F | F Price Prediction) CEO Jim Farley stated that the dawn of a large and successful electric vehicle (EV) market in the United States will be delayed well into the future. His comment is that the elimination of the EV tax credit could cut EV sales by half over the short term. Specifically, he said the EV market will be “way smaller than we thought.” Yet, in August, he announced Ford’s Universal EV Platform. Its first vehicle will be a mid-sized electric truck with a 2027 launch date. It could be released into a market where EV sales continue to be weak.

Ford has invested tens of billions of dollars into its EV business. It says it will lose another $5 billion this year. And it also says it has already invested $5 billion in its new EV platform and will invest another $2 billion to “transform the Louisville Assembly Plant, securing 2,200 jobs while working together with the UAW.”

Notably, Ford has only announced the one vehicle that will come off the new assembly line in 2027. Just that mid-sized truck is not much to show for what Ford says is among its most important strategic moves in decades.

Ford’s EV sales through the first three quarters of the year totaled 69,600, representing a 2.8% year-over-year increase. Sales of internal combustion vehicles were up by 5.7% to 1,416,610. The numbers are more than enough to show what the company’s future is for many years.

Farley and his boss, Bill Ford, made the wrong bet on EVs. The bet looks worse based on Farley’s comments this week. If Ford wants to be serious about the fact that the future of the car industry lies with EVs, it needs to release several models from its new assembly line in 2027. One is not enough.

Ford cannot continue to whipsaw investors as it teeters between a future of gasoline-powered cars and an EV world. Management needs to get its story straight and sell it to shareholders.

Wall Street Walks Away From Ford as CEO Farley Flounders

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.