It should likely not surprise anyone that legacy automaker Ford (F) has its own plans in mind for self-driving vehicles. After all, what do we want more than to have our cars just take us where we want to go while we sit, read books, play on our phones, or do whatever that is not staring at another car’s bumper for several dozen miles? Ford made a big move in this regard recently, and shareholders were not happy. They sent Ford shares down fractionally in Monday afternoon’s trading.
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Right now, reports note, there are two major approaches to the self-driving car concept. There is Tesla’s (TSLA) Full Self-Driving system, which focuses on camera use. And there is Alphabet’s (GOOG) Waymo, which uses Light Detection and Ranging (LIDAR) as its basis. Ford’s CEO, Jim Farley, noted that he had been talking to both companies about self-driving technology, but is apparently putting his support behind Waymo and its LIDAR-focused system.
When asked at the Aspen Ideas Festival, Farley noted that both companies have made a lot of progress toward self-driving cars. But Waymo is actually ahead as far as Farley is concerned because of its use of LIDAR. While Tesla’s system might fail if the cameras are ever blinded by light conditions or fog or the like, LIDAR will be much more likely to spot problems and work accordingly.
“The Most Humbling Thing”
But Farley did not only talk about LIDAR use and self-driving cars. He also had some words about the Chinese electric vehicle market, calling their progress on this front “…the most humbling thing I have ever seen.” Farley noted that Chinese electric vehicles were substantially more advanced than their Western counterparts, which likely also explains why Farley et al travel to China a couple times per year to study the market.
While China’s development pace of electric vehicles has been substantial, we must bear in mind the sheer weight of government subsidy that the Chinese Communist Party put behind such developments. With that in mind, it is little surprise that such developments flooded the market at a rapid pace; you get more of what you subsidize, after all, and the Chinese market responded in a big way.
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 15.36% loss in its share price over the past year, the average F price target of $9.71 per share implies 10.22% downside risk.
