Ford is going through a complete fundamental corporate redesign for the coming decade. After investing heavily in new technologies like autonomous driving, ride-sharing, and new electric cars like the Mach-E, is now the right time to invest in Ford stock?
After the launch of the Mach-E, Ford managed to make a huge dent in Tesla’s market share, which fell 12% compared to last year solely because of the Mach-E. Ford sold more than 3700 Mach-E EVs till now, which, combined with the sales of the newly launched Ford F-150 Hybrid version, accounts for a 56% increase in EV and hybrid sales compared to a year ago.
Ford is allocating a combined $29 billion in capital towards EVs and autonomous driving, which is slated to be the two of the most profitable fields going forward. The electric F-150 hype is growing day by day and we can expect huge sales numbers when it finally releases in 2022, which could suddenly boost stock prices especially since the truck market is booming right now.
Recently after Google announced its partnership with Ford as their preferred cloud service and the formation of a new collaborative group called Team Upshift, stock prices rose 2.9%.
Ford’s new CEO James Farley is planning on investing more in emerging technologies which will keep Ford at the forefront of development going forward, increasing their value as a company. The planned relaunch of the Bronco is one of the first decisions to put ford back on the map and it has worked wonders for the company. The iconic name will bring in a lot more customers, boosting revenue and earnings.
With all these factors in play, and the success of the updated F-150, Ford stock is gaining value and now may be the best time to invest before prices rise even further.
Is the new 2021 Ford F-150 boosting stock?
The Ford F-Series trucks have been the best seller of the company ever since its launch in 1997, with the F-150 contributing to most of the sales. Needless to say, the 2021 Ford F-150 is the make or break truck for Ford especially in the U.S. Fortunately, the newly introduced 2021 version of the F-150 which received a lot of updates has been a smash hit since its release.
Even though the design resembles the previous generation, Ford says 92% of the parts received a redesign with only the cab and pickup box being carried over. The F-150 continues to be available with several engine options including two turbocharged EcoBoost V6 engines, a 5.0L V8, 3.0L Diesel V6, and a base 3.3L V6. New for this year is an optional hybrid powertrain. Dubbed PowerBoost, an electric motor is paired with the 3.5L V6 engine for more efficiency.
After losing market share in recent years to Ram and Chevrolet, Ford’s new F-150 is a revolutionary step forward and is likely to shoot sales up in recent years, as a result boosting stocks with it. The new F-150 is a perfect combination of a truck, mobile office and a workshop all rolled into one, making it the best choice of the lot. According to Ford, the truck received a complete top to bottom overhaul with several improvements made along the way.
The biggest change for this year is the new hybrid powertrain which has sold in surprising numbers and is the first full-size hybrid pickup truck and has helped Ford in increasing their hybrid and EV sales by 56% since its launch. A new fully electric F-150 is in the works and is expected to launch as early as 2022. The F150 Electric will go head-to-head with the new Hummer EV and Tesla Cybertruck. After such a heavy investment in the EV space, Ford is expected to make a healthy profit over the years, especially with the minimal competition. This should further boost stock prices over the upcoming years, and also makes the new F-150 a critical part of Ford’s success over the coming decade.
Ford’s New CEO James Farley is changing the game
The car industry has been his whole life and he is planning on making meaningful changes to the whole company. The latest numbers show Ford outpacing sales by 4% and still growing. We can expect a strong outlook for 2021 based on what he was able to achieve since he was appointed CEO back in October.
With a complete focus on profits rather than revenue, the company is now paying down debts and closing most of the unprofitable brands to reinvest in more profitable brands.
The Electric Mustang
Ford took a controversial turn by announcing an electric mustang. For a car brand that has been known purely for its V8 naturally aspirated old school engines, taking a full 180 all of a sudden and going electric surprised a lot of people. After the current chip shortage fiasco is over, Ford could sell a lot more electric mustangs, further increasing profits and the companies value.
The Electric Mustang is an example of how focused Ford is on bringing new EVs and investing in electric technology.
Even though the details haven’t been fully announced, it is speculated that Ford bought a 15% stake in the company while it was just starting up. Now, Rivian is worth more than 40 billion, making Ford several billion in this investment alone.
Google partnership and Team Upshift
Ford CEO James Farley recently announced that they are partnering up with Google for a group called Team Upshift. Ford plans to reinvent the connected vehicle experience with this collaboration. Ford has also named Google as its preferred cloud provider to leverage Google’s expertise in data management, artificial intelligence, and machine learning. The partnership deal is made for 6 years and as soon as 2023, Ford and Lincoln vehicles could be powered by Android with Google apps and services built-in.
Team Upshift also aims to further improve customer experiences, accelerate the modernization of product development, manufacturing, and supply chain management for efficient plant performance and give customers real-time notices such as maintenance requests or other alerts.
As of Feb 1, this partnership has gained Ford a 2.9% rise in stock prices, which will increase even further as time goes on.
Reviving an old iconic brand lineup
Ford recently announced the relaunch of the Bronco SUV which was discontinued back in 1996. This strategy helps Ford lure in more customers who may have owned the older Broncos and increase sales thanks to nostalgia.
Should you buy Ford Stock right now?
With the current trend and heavy investments in upcoming technologies, Ford stock prices may rise substantially in 2021 as it has already started rebounding. With a new CEO at the helm who is concentrating on future technologies, the company may increase in value as time goes on especially after new EVs like the Ford F-150 EV are launched soon.
The estimates for 2021 are strong enough to warrant an investment sooner rather than later.