Mach E effect on Ford stock price?

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mark360

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I think he just saw some clock bait headlines.
Yeah, it's easy to get caught up in the negative. I like to look industry wide at what all the players are doing, and they all aren't doing particular well in the ICE field, with many including GM dropping out of cheaper sedans and small compact cars.

GM just doesn't have a compelling EV offereing, I think their Hummer EV is a massive failure due to costs 70k+ but that is yet to be seen. Ford is the only one coming out with an actual affordable EV that looks amazing and has the Tech.

With Ford selling the most trucks in the world, their commitment to making an EV F series will further propel them in the future. They are committed by the amount of cash expenditure they are spending and I think now is the time to pick up their stock, and hold on to it because in the next 5 years I think we will see it back up to 90s levels.

Toyota continues to shrug off full EV's. GM is taking a more expensive approach with the Hummer, and VW, audi, and jag's offereing are way too expensive or just not compelling.

The only segment where EV's are growing rapidly are in the $35-$60k price range. The only other compelling EV that sits there is Ford's Mach E. It's the #2 to Tesla and with a dealership within 10 minutes of virtually everyone, getting easy access to this will enhance sales like wildfire.

I just can't wait to see the growth!
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I always say, if you're willing to buy a company's product you should also buy their stock.
I take the opposite viewpoint -- I value diversification. If I own the product, I already own more than enough of an interest in that company.

I take the same stance with my employer. I don't buy their stock. I'm already too heavily invested as an employee. ?

Years ago, I suppose I shared your view. I bought shares of Motorola, who was then my employer. They tanked big time and I eventually sold my shares at a large loss.
 

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That is hilarious, they are so successful. Does he realize the F series truck sales 1,000,000+ copies per year, the best selling vehicle in the world? Ford isn't going anywhere! ?
And let him know there's a fully electric F-150 coming also, so they're making the pivot to EVs with the company's best selling vehicle.

Curious btw does anyone know if the Mach-E and electric F-150 will share the same EV platform? I know other companies like Tesla and Rivian have a single "skateboard" platform that they build vehicles of all sizes on but what is Ford's approach?
 

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I can't see how they would use the GE2 for the electric F-150. The sizes and capacity are very different. The prototype electric F-150 they've used in videos, like the one pulling the train, uses a standard F-150 frame. They may have a new electric F-150 frame but even the Rivian platform may be too small for the F-150 and may be used for a future eRanger. However, Ford may work with Rivian to build a larger, more heavy duty platform for the electric F-150.

Ford said they are using the Rivian platform for a new Lincoln product
https://www.theverge.com/2020/1/29/21113578/lincoln-rivian-electric-suv-ford-platform-tech
 

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Ford is currently trading at what appears to be a 5 year low, which is crazy since the company is committing to tech and the future of electrification more so than any other brand
If anything, that's part of the reason why the stock price is down. EVs are bad for the bottom line in the short run. Takes huge amounts of money to develop them and they have small (if any) profit margins.

But as they develop platforms that can be leveraged by multiple models for economy of scale, that should gradually improve.

One of Ford's biggest issues over the last year has been the botched rollout of the new Explorer (one of their biggest cash cows).
 


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And let him know there's a fully electric F-150 coming also, so they're making the pivot to EVs with the company's best selling vehicle.
Just a slight nitpick... I wouldn't call it a Pivot, I'd call it an addition. The ICE F-150's (and pretty much all their trucks and SUVs) aren't going anywhere. Those are the cash cows, and their core business. They're just expanding that by ALSO offering some BEV and PHEV as well.
 

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They're getting mostly out of the car (sedan) business and concentrating mostly on SUVs and trucks because that's where most of the money and demand is. Especially in the US. US consumers want mostly SUVs and trucks, not cars.
 

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I always like to use Tesla as a sanity check. They haven't made a fiscal GAAP profit since being founded, but yet are worth 170 billion. People forget that the EV market only makes up about 2 million vehicles a year, less than half of what Ford sales annually and majority of that market is in china/europe. Tesla only made 400,000 out of those 2 million last year with declining model s/x sales by 40%.
It is crazy that a company like Tesla has such a (speculatively) high stock price and market cap than a far bigger company like Ford.

One of the biggest problems for the legacy automakers like Ford is their pension liabilities. Drags them down like an anchor.

https://www.barrons.com/articles/pensions-stocks-accounting-key-facts-after-ges-freeze-51570479160
 
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They seem healthy to me, Ford had a bad year and still profited 47 million. GM is going strong as well with very good profitability. Not sure where you are getting them in trouble from? Care to explain?

What they realize it competing with a company like Toyota is silly. The margins on a $20,000 vehicle don't justify the capital expenditure of tooling, design changes, support, warranty, etc.

12% margin on a $20,000 vehicle that isn't what the brand is known for likely cost more than it's worth. They dropped out for a reason, likely to become a more profitable company.

People just don't want cars anymore. People want SUV's, crossovers, and Trucks. Unless it's a sports car, it's pretty much dead in America. Even the Toyota Camery the worlds most popular car only sold 330,000 units (2019) and it's declining even more in USA.

If SUV's and crossovers lose their appeal, they can easily retool a factory in six months to produce cars again. These are car companies that can adapt quickly to changing economic conditions.
 
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Don't know why you are singling that out when I asked why you say GM and Ford are in trouble? I think on the contrary. I have a little bit of expertise in finance.

Tesla had to lower the price on the Model 3 in order to spur demand back up. Also, demand is not as strong as you make it out. If you order a vehicle, you can get it in 4-6 weeks currently. Their vehicles are made to order, so that is pretty typical demand. Nothing "Huge" about that.

Sales are way down on their S/X by 40%. Lead times on those vehicles are still 4-6 weeks.

They do technically sell every vehicle they make (which is a silly statement), but they sell to the demand they have and try to increase demand by lowering the price (like they did on the S/X but it didn't help) and they did on the 3.

Tesla may have the lead in battery tech and motors, but Europe doesn't seem to care. Tesla only accounts for 20% of sales worldwide outside of the US. While that is a good number, it's far from a market dominance number.

Why are you trying to argue over Tesla and defend Tesla? They are peanuts in the automotive industry and the only thing they are good at is Technology. All other automakers make a vastly better vehicle fit and finish wise with vastly better service and support.

I own a Model 3 and it'll probably be my last Tesla unless Ford shits the bed on this Mach E. I doubt it though, they are serious about this and if you keep up with what they're doing it is downright impressive.

Market price should be high based on those growth and financial factors They make a solid gross profit building the cars, it is the investments in making more cars that is taking the profit, see item 1 above to know why that raises Tesla’s stock price.
So their stock value should be based off them selling 5 million vehicles a year when they currently only make 400,000 and the entire EV market makes up about 2 million vehicles? OK, that makes a lot of sense. Even if the market were to double tomorrow, Tesla still only has 20% market share globally. That puts them selling 800,000 vehicles. Still no where close to their current valuation. By then, Ford's Mach E will be just as good as a Model Y AND much cheaper. Ford's first EV is already the a little cheaper than the Model Y and it didn't take them 10 years to get there.
 
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It is crazy that a company like Tesla has such a (speculatively) high stock price and market cap than a far bigger company like Ford.

One of the biggest problems for the legacy automakers like Ford is their pension liabilities. Drags them down like an anchor.

https://www.barrons.com/articles/pensions-stocks-accounting-key-facts-after-ges-freeze-51570479160
Yes, at times I remember reading why Ford should have declared bankruptcy. Their pension debt is quite enormous. Would have erased that.
 
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Good last paragraph, although out of warranty work is not what Tesla is suppose to be known for. Their charging infrastructure and service will make them good money, but when people experience the terrible service at a Service center they won't go back.

Part of why Tesla has pushed me away from them and made me not a brand loyal customer. Their after sales support is just awful.

Buddy of mine today was talking to me about it. I told him to stay away until the Mach E comes out and see how it does. If he doesn't think it is good value, go with the Tesla. I just warned him about what he was getting himself into.
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