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Ford's Cut and Run Makes Sense This Time

24/7 Wall st

Key Points:

  • F-Series pickups account for 38% of Ford’s U.S. sales, far outpacing EV sales.
  • Ford is heavily incentivizing EV sales, but adoption remains slow.
  • Toyota’s focus on hybrids is proving more successful than the full EV approach.
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Doug and Lee discuss Ford Motor Company’s (NYSE: F) recent challenges and strategy shifts, particularly regarding their electric vehicle (EV) efforts. Despite spending $30 billion on EV development, Ford is struggling to sell models like the Mach-E Mustang and the F-150 Lightning. EV sales are minimal compared to their gas-powered counterparts, such as the F-Series trucks, which make up a significant portion of Ford’s sales. The conversation highlights Ford’s pivot back to traditional and hybrid models, mirroring Toyota’s successful focus on hybrids. They also touch on the declining trade-in value of older EVs, mainly due to the high cost of battery replacement, which could further impact the EV market negatively.

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Edited Video Transcript:

The Ford Motor Company, like most other car companies, puts out a monthly report, US, all of its sales, total sales, and then by model.

So up, you know, fourteen percent to one hundred and seventy thousand for, you know, the whole company, the F-One fifty, the after the F-Series, which is, you know, their superstar pickup line, thirty eight percent of all Ford’s unit sales in the United States were F-Series pickups.

Now, they talk about the fact that their EV sales are up by double digits.

The problem is, is that they’re up by double digits to like three thousand.

So if you look at the F-Lightning, the EV version, you know, it’s like three thousand.

The gas powered version is like close to seventy thousand.

So, you know, if you’re thinking Fords and EVs, what’s wrong with this picture?

What it does tell you, though, is it’s it’s another reminder of why after Ford spending this thirty billion dollars on trying to get into the EV business has gotten out of that investment as quickly as possible.

They couldn’t have turned their backs on this any faster without, you know, the blood draining from their heads and fainting.

They’ve got the Mach-E Mustang, the F-Lightning.

They cannot sell them.

So, you know, I blame the Ford management for deciding to get into EV business and put as much money in.

But you sort of have to give them credit for dumping it once it was very, very clear that it wasn’t going to happen.

So when I look at Ford stock and I look at Ford, I like the fact that they’ve gone back into the future.

Yeah.

And it’s interesting because it’s where my neighbor next door, they have two Fords and they love them.

They’re built great.

And when they, I think I told you about this, you know, they came out with the Maverick truck.

Which kind of replaced the Ranger.

It’s kind of a smaller, almost SUV sort of open bed truck.

And for our viewers and readers, the Maverick was a car that was a very ugly version of a four door that came out in the early seventies and didn’t last too long.

But apparently my neighbor says that the truck is awesome and they didn’t build enough.

And it was hard to get it.

And again, ostensibly replace the Ranger.

But if Ford would stick with their core business, they wouldn’t have these issues so often.

But like you said, better to cut and run rather than let it just continue to smolder and stack up.

Yeah.

I mean, look, they are still offering zero percent financing for seventy two months on the Mustang Mach-E.

You can see little signs that one of the reasons they’re selling EV units at all is, is that they’re, you know, sort of begging customers to come in through the, through the doors of the showrooms to get them.

But I mean, every month I’m going to come back to this and look at the sales for Ford.

I’m going to look at it by unit.

Don’t think we’re going to see changes for a year, maybe two or three years.

The F series gas powered is going to be over a third of Ford’s sales.

EVs are not going to be good.

They’ve moved into hybrids.

If you look at the numbers for August, the numbers are good for hybrids.

I’m noticing that even in China, plug-in hybrids are becoming, they’re becoming more attractive because you don’t have to worry.

Range, as you know, everywhere, my EV, two hundred and fifty miles.

It takes away a lot of the range anxiety.

So I think that the market, the car executive market made a mistake.

Yeah.

The mistake was go to EVs instead of doing what Toyota ended up doing, which is to say, you know something, we’re going to stick with hybrids.

We don’t think this EV thing has legs.

If you look at their sales now and their hybrid sales, guess what?

Toyota was again, the smartest guy in the room.

Well, and again, they started with hybrids with the Prius hybrid years ago, you know, ahead of the game that it’s just like, it didn’t anybody else catch on that, that that could be the route to take, you know, and it’s interesting.

I saw a statistic that, that the older an EV gets, the less trading value it has because the battery may need to be replaced.

And the battery is the most expensive component in the car, you know.

And so as as stuff that was sold in twenty twenty one, twenty twenty.

I mean, those are now three, four and five years old.

The trade in if the trade in value is horrible, that’ll only be another spike into the, you know, into the heart of the EV industry.

Yeah, that’s going to be tough.

Yeah.

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