We know that, not so long ago, legacy automaker Ford (F) CEO Jim Farley revealed that the size of the electric vehicle (EV) market was likely a lot smaller than expected. That point was underscored by word from one of Farley’s predecessors, Mark Fields. Fields had a clear assessment of not only Ford, but also all carmakers’ stance on the market. This stand did not hurt Ford shares much, however, as they were up fractionally in Wednesday afternoon’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Basically, Fields noted, Ford—and most every other United States automaker—overestimated the size of the EV market and started ramping up production before they really had the market to justify it. Fields explained, “Over the last couple of years, the automakers really went full bore in putting in capacity for EVs. They really didn’t have a good discussion on the consumer, in terms of what it was going to take to get the consumer to buy these EV products.”
This echoes the sentiment from Farley, who declared that the EV market was “…way smaller than we thought,” especially once the electric vehicle tax credits were slated for removal.
Price Cuts
But Ford is not planning to go down without a fight. Ford is launching a cost-cutting plan on its F-150 Lightning electric pickup line, and is also augmenting it with some improvements in overall range. With Ford grappling with rival Tesla (TSLA) for the top-seller slot in electric pickups, such a move may help Ford cement its newly-recovered crown.
Ford is paring back costs on the Lightning by as much as $4,000, reports note, and the STX now offers an extra 50 miles of driving range. These may be rather minor improvements, but minor improvements may be enough to sway fence-sitters and turn them into buyers, a definite plus for Ford.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 10 Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 5.62% rally in its share price over the past year, the average F price target of $11.41 per share implies 2.93% downside risk.
