Ford Motor
F
recently announced a range of initiatives for sourcing battery capacity and raw materials to reach its targeted annual run rate of 600,000 electric vehicles (EVs) by late 2023 and more than 2 million EVs by the end of 2026.
The production goals are part of the Ford+ plan. The company expects a compound annual growth rate for EVs to exceed 90% through 2026, more than double the forecasted global industry growth.
Ford intends to invest more than $50 billion in EVs through 2026 that aims to generate total company adjusted EBIT margins of 10% and 8% EBIT margins for EVs.
The company plans to transform more than half of its global production to EVs by 2030 and achieve carbon neutrality, globally, at most by 2050. Riding on strength in EV demand, Ford seeks to create a sustainable EV supply chain.
The 600,000 global EV run rate that is expected to be reached by late 2023, includes a range of EVs. It will consist of 270,000 Mustang Mach-Es for North America, Europe and China; 150,000 F-150 Lightnings for North America; 150,000 Transit EVs for North America and Europe; and 30,000 units of an all-new SUV for Europe, whose run rate will significantly ramp in 2024.
Moreover, Ford will add lithium-iron-phosphate cell chemistry to its portfolio, besides its existing nickel-cobalt-manganese chemistry. This will provide customers with prolonged years of operation, with minimal range loss. It confirmed to have secured 100% of the annual battery cell capacity from global battery companies required to support the 600,000 EV run rate.
Ford will also leverage its partnership with LG Energy Solution (LGES) to cater to its 2023 battery capacity target.
LG Energy Solution is also doubling its capacity at its Poland facility to support cell production for Mustang Mach-E and E-Transit models.
Ford’s high-volume F-150 Lightning will also get the battery packs required for scaling up cell production.
To achieve more than 2 million EVs by late 2026, Ford has sourced nearly 70% of the battery cell capacity.
Ford and Contemporary Amperex Technology Co., Ltd. (“CATL”), the world’s largest battery producer, have signed a separate non-binding MOU supply batteries in Ford’s markets across China, Europe and North America.
Ford also announced capacity scaling and direct sourcing of battery cell raw materials via a number of joint ventures.
The company also announced its cooperation with major mining collaborators, like Vale Canada Ltd., PT Vale Indonesia, Huayou Cobalt and BHP. The major aim is to explore opportunities for EV and nickel supply.
Ford also continues to work to localize processing of key battery materials in North America.
The sky high demand for EVs stimulates Ford to actively engage in initiatives that will strengthen its EV footprint.
Shares of Ford have lost 6.6% over the past year against the
industry
’s 0.5% rise.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
F carries a Zacks Rank #4 (Sell), currently.
Better-ranked players in the auto space include
CarParts.com
PRTS
,
American Axle & Manufacturing Holdings
AXL
and
Standard Motor Products
SMP
, each carrying a Zacks Rank #2 (Buy), currently. You can see
the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here
.
CarParts has an expected earnings growth rate of 35% for the current year. The Zacks Consensus Estimate for current-year earnings has been kept constant in the past 30 days.
CarParts Group’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. PRTS pulled off a trailing four-quarter earnings surprise of 78.34%, on average. The stock has declined 51.2% over the past year.
American Axle has an expected earnings growth rate of 93.9% for 2023. The Zacks Consensus Estimate for current-year earnings has been revised 1.2% in the past 30 days.
American Axle’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. AXL pulled off a trailing four-quarter earnings surprise of 847.92%, on average. The stock has declined 8.7% in the past year.
Standard Motor has an expected earnings growth rate of 5.2% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days.
Standard Motor’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 40.34%, on average. The stock has risen 11% over the past year.
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