“Ford Intends to Match the Cost Structure of Leading Chinese Players”: Ford Stock (NYSE:F) Notches Up With Plans to Beat China on Prices

We know that legacy automaker Ford (F) has been taking China very seriously. Driving its cars, watching its production, basically just considering everything and anything it can do to be more like China. And new reports represent a serious shot across the bow, as Ford vows to match China on pricing, in at least some ways. This was big news to investors, who gave Ford shares a fractional boost in Wednesday afternoon’s trading.

The revelation was part of a larger report about Ford’s plans for “affordable EVs,” which are set to come out in 2027. We had already heard that Ford expected to lower costs on its next line of electric vehicles (EVs), thanks to taking what it learned about EVs already and rolling that knowledge into the next production line. But the idea, as revealed by Ford’s EV industrial plan leader Lisa Drake, is that eventually, Ford will be able to take on China in pricing.

This sounds preposterous on its surface, especially in light of the fact that much of China’s EV production is actually sold at a loss. While some of China’s gains are due to “economies of scale and battery technology,” as noted by David Bailey, Birmingham Business School professor of business and economics, other parts of these gains come from government subsidies and low labor costs. Moreover, reports note, Ford’s math is built on somewhere around $700 million in federal tax credits, which may not be there when the next budget cycle hits.

Oh, And Another Recall

But then, Ford will have to contend with its own supply chain issues, reports note, as Ford has ordered its dealerships to halt any deliveries—or merely demonstrations—of about 300,000 entries in the Mach-E class. Why? There is, and brace yourself for this, a problem with the battery.

The reports noted that there is a glitch in the battery system somewhere that can “…prevent the doors from being unlocked,” reports note. Apparently, the glitch can cause the locks to “retain their last lock / unlock status.” If you are on the outside of the car when this happens, you will likely be inconvenienced. If you are inside the car, meanwhile, you may be a prisoner of your own Mustang. In sufficiently hot weather, this could kill you. A software update is currently being worked on, reports note, but is not available yet.

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, 12 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 12.73% loss in its share price over the past year, the average F price target of $9.71 per share implies 6.95% downside risk.

See more F analyst ratings

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