Bad news emerged today for legacy automaker Ford (F), as CEO Jim Farley considered the market post-electric vehicle credit and discovered it was nowhere near what he had hoped it would be. In fact, Ford looks for a potential loss of as much as 50% of the market once the trade-in credits fall away. That news hit Ford investors like an electric car, sending shares down modestly in Tuesday afternoon’s trading.
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Farley noted that, once the government tax credits went away, the incentive for people to buy an electric vehicle dropped with it. And that in turn would crater the market to the point that Farley “…wouldn’t be surprised…” to see electric vehicle sales go from between 10% and 12% of the market to somewhere around 5%.
Farley elaborated, saying, “I think it’s going to be a vibrant industry, but it’s going to be smaller, way smaller than we thought, especially with the policy change in the tailpipe emissions, plus the $7,500 consumer incentive going away. We’re going to find out in a month.” Farley also noted that the concept of “partial electrification,” as in hybrid cars, seems to be easier for the American car buyer to accept. Considering that hybrids have certain advantages over pure electric vehicles, this makes a certain amount of sense.
It’s Another Huge Recall
And then…because it just is not the same somehow without it…news of another recall emerged, with over 115,000 trucks on the block. Sadly, this will not be a simple over-the-air fix, either. This is an extremely serious issue with the steering. So even getting your truck to the dealership could be a hazard waiting to happen.
If you have an F-250, F-350 or F-450 from 2020 or 2021, then there may be a problem with your vehicle’s steering column. The upper shaft has a defect, reports note, that could lead to the shaft detaching from the steering column and ultimately causing a loss of control. Apparently the part can be readily replaced, though. Once again, dealerships are on the front line, standing ready to fix the defect in question and keeping your pickup safely on the road.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on three Buys, eight Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 12.47% rally in its share price over the past year, the average F price target of $10.84 per share implies 9.36% downside risk.
