Analysts Believe Ford Could Change its Strategy for Electric Vehicles Thanks to New CEO Jim Hackett

electric vehicles

Shareholders had been concerned when Ford (NYSE:$F) announced it won’t be producing and distributing electric vehicles until 2020. At a time when the automobile industry was facing massive changes with electric vehicles gaining so much attention and popularity, many thought Ford’s adjustment to electric vehicles was disappointing. The company had been focusing on hybrid vehicles instead. However, all this was before the company replaced then-CEO Mark Fields with Jim Hackett.

With Hackett now at the realm at the company, many believe that Ford’s attitude towards electric vehicles will change dramatically. Already, Hackett has appointed a former Ford executive to lead the company’s electric and/or autonomous vehicles business. Although Hackett only took over Ford’s CEO position a little over a month ago, analysts like Adam Jonas from Morgan Stanley (NYSE:$MS) have already expressed optimism about Ford’s future in electric and autonomous vehicles. In a note to clients, Jonas wrote, “We expect Ford to go ‘all-in’ on EVs. With an emphasis on pure EVs. Hybrids? Not so much. Prior management was vague with how its $4.5b investment in ‘electrification’ would be allocated. We are hopeful for a significantly upgraded level of transparency, given the pace of change in EV adoption and expenditure worldwide.”

Ford had previously invested $4.5 billion in a plan to turn some of Ford’s already-existing models into hybrid vehicles, but little to no plans were made in regards to electric vehicles at the time. Jonas hopes that, under new leadership, Ford will be more open about its future plans regarding how the company will adapt to the rapid changes the automobile industry is experiencing.

But while Jonas is optimistic about Ford’s electric vehicle future, it doesn’t mean that everyone will be on board. The Morgan Stanley analyst expressed concerns on whether or not investors and/or shareholders will be happy with Ford’s strategy. If Ford were to become more open to partnerships, produce new models and products, and invest fully in electric vehicles, the automobile company will have to sacrifice some profit in the short-term, Jonas noted. Investors may not be happy with some of these sacrifices.

Ever since the rise of Tesla (NASDAQ:$TSLA), Ford has been struggling. The market capitalization of the electric vehicle production company had recently exceeded that of Ford’s. The automaker is currently trading at a little over $10 per share – hopefully it will rise as the company recuperates itself with its new CEO.

Ford have expressed a possibility in making an all-electric F-150 pickup, something that can be greatly beneficial as its F-Series trucks has been responsible for a great deal of the company’s profits. However, Ford still needs a big push in order for investors to regain their beliefs in the automaker’s success.

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About the author: Grace is currently studying at UBC to achieve her BA in Computer Science. She is due to graduate in 2020. As a content creator, Grace has written financial analysis, stock market news, and informational investing articles. She also worked as an editor with her university publication 'UBC Undergraduate Journal of Art History'.