Ford Delays Launch of New BEV Models Due to Heavy Costs

What You Need To Know

Ford Motor Company (NYSE: F) is reportedly delaying the launch of new battery electric vehicle (BEV) models in the US due to heavy costs incurred for existing models, forcing a sales program restructuring. As of July 1, all US dealerships will sell BEVs, ending an exclusive program for "certified" dealers. This program, which started in 2022, required dealerships to invest in charging infrastructure and customer service for popular models like Mustang Mach-E, F-150 Lightning, and E-Transit.

CFO John Lawler stated:

We will not launch a second-gen [EV] product unless it's profitable within the first year and we are going to get a return on that capital we're investing,

Ford plans to debut an electric truck in 2026 and a three-row SUV in 2027. Despite being the second best-selling EV brand in the US after Tesla, Ford incurred losses of $1.3bn before interest and taxes in EV segment due to high costs, leading to price reductions and delays in EV investments. Tesla saw a 13.3% sales drop, while overall US EV sales increased by 2.6% in the first quarter.

Why This Is Important for Retail Investors

1. Insight into Company Strategy: Retail investors can gain insight into Ford's strategic decisions and financial performance.

2. Impact on Stock Price: Understanding delays in launching new BEV models and incurred losses can help investors assess potential impacts on Ford's stock price in the short and long term.

3. Competitive Positioning: Knowledge of Ford's positioning in the EV market compared to competitors like Tesla can inform investors about the company's viability and competitive advantages.

4. Future Growth Prospects: Information about Ford's future plans for EV releases provides retail investors with a glimpse into the company's potential for growth and innovation in the electric vehicle sector.

5. Financial Health Analysis: Insights into Ford's financial challenges and adjustments due to high costs in the EV segment give investors a clearer picture of the company's overall financial health and stability, aiding in investment decision-making.

How Can You Use This Information?

Here are some of the investing ideas that can be explored using this information:

Value Investing

Assess if Ford's current stock price reflects the delays in BEV models and losses incurred in the EV segment, potentially identifying value opportunities.

Value investing searches for undervalued companies that trade for less than their intrinsic values, with the expectation that they will eventually be recognized by the market.

Growth Investing

Evaluate Ford's future growth prospects in the EV market post-restructuring, considering the planned new releases and strategic adjustments.

Growth investing focuses on stocks of companies expected to grow at an above-average rate compared to other stocks in the market; learn more in our article titled 'What is Growth Investing?'.

Event-Driven Strategy

Capitalize on market reactions to Ford's restructuring news and financial challenges in the EV segment for potential short-term gains.

An event-driven strategy capitalizes on stock mispricing that may occur before or after a corporate event, such as a merger or acquisition.

Read What Others Are Saying

Argus Media: Ford suspends new EV models after further losses