Although Ford reported a decline in electric vehicle revenue on Wednesday, senior executives still expressed optimism during the earnings call.
Ford CEO Jim Farley confirmed that the market needs affordable electric vehicles, which Ford will offer in its next generation of products. He also promised that the models would be profitable and that Ford would increase production to meet demand for its popular hybrid models such as the F-150 PowerBoost and Maverick Hybrid.
It was a promising earnings call for Ford, which has struggled to attract investors. Ford’s stock price is one of the lowest globally compared to its earnings, a sign of a lack of confidence among investors in Ford’s main business. However, Ford has a massive fleet business, a strong and in-demand hybrid portfolio, and the Mustang Mach-E electric vehicle is the second-best-selling electric SUV in the U.S. behind the Tesla Model Y.
Ford has had to adjust its expectations for EV adoption. However, the company now believes it is on the right track, with a number of powerful hybrid models and the popular Mustang Mach-E. The difficulty is not only selling electric cars but also doing so profitably.
Sales of the Mach-E have grown rapidly since Ford cut its price by 17 percent. Farley said affordability is top of mind for consumers, as evidenced by Mach-E sales growth, and he promised the next generation of Ford electric vehicles will be both affordable and profitable. It is noted that this shift comes at a time when Tesla is said to have lost interest in the rumored cheap electric car “Model 2”, and the company may have abandoned the project in favor of Elon Musk’s promised autonomous driving. Taxi project.
Ford said models such as the Maverick, F-150, F-250 and Ranger are selling like hotcakes, and the company is on track to build a profitable electric vehicle business while continuing to generate cash flow from its gasoline-powered vehicle business. To stay relevant and lower emissions, Farley said Ford will introduce hybrid models in every segment. The key is to control prices as consumers face higher interest rates that make it much more expensive to borrow money to buy expensive cars and trucks.
All in all, Ford aims to have a strategic advantage in affordable electric vehicles. General Motors is trying to achieve the same goal with the Chevrolet Equinox EV, and Tesla also has the Model Y. Who will win the race to bring long-range, affordable electric vehicles to younger consumers and less affluent buyers is anyone’s guess, but it’s certainly a good thing that more companies are joining the market.
“What’s really exciting for us is we see a gap in the market,” Farley said. “We believe we can do it profitably in the $25,000 or $30,000 price range.”
