Ford Shifts to Electric Cars, Plans To Spend at Least $20B to Reorganize — How It’s Impacting Stock Prices

Motor Show, Essen, Germany - 02 Dec 2021
Martin Meissner / AP / Shutterstock.com

Gearing up for a future where electric vehicles dominate our nation’s roadways, Ford Motor Company, best-known for its iconic Mustang sports car and “Ford Tough” line of F-150, F-250, and F-350 trucks, announced a shift toward electric vehicle manufacturing. The company will be investing $10 billion to $200 billion, on top of its $30 billion commitment through 2025, on the manufacture of EVs, Bloomberg reported.

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Driven by Doug Field, a former executive for Apple Inc. — where he spearheaded the company’s car project — and Tesla, the effort intends to convert Ford factories worldwide to electric vehicle production rather than gasoline-powered (internal combustion engine, or ICE) vehicles. The announcement drove Ford’s valuation above $100 billion in January, with the stock hitting $25.87 in mid-January, a high it hadn’t seen in 20 years, Motley Fool reported.

Fourth quarter sales were driven by new model releases, including the return of the Bronco, the Bronco Sport, and the Mustang Mach-E electric vehicle. In 2021, Ford sold roughly 27,000 Mustang Mach-E cars.

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It’s not just their EV plans causing Ford stock to climb, however. The company reported “solid delivery numbers” in the fourth quarter of 2021, Motel Fool reported, and the company seems to have more success sourcing silicon chips than its ICE vehicle competitors, including Toyota and General Motors.

Should You Buy Ford Stock Now?

Although Ford Motor Company stock now sits close to its 52-week high, is it still a buy? Experts across the board are calling it a “buy” or “hold,” with most seeing the stock on its way up in the next few months.

Investors Business Daily gave Ford a composite rating of 81 out of 99, putting it near the top of all stocks, but not within the top 10%. The website also said forward-looking estimates are pointing toward growth. However, noting that the stock is close to its high, IBD stated Ford is not a buy now.

A Closer Look at Ford’s Future

A look at the company’s reorganization plans might deliver further insight if you are considering investing in Ford. The company intends to hire engineers specializing in battery chemistry, artificial intelligence and EV software. Additionally, Bloomberg reported that the company is considering spinning off parts of the EV business, which would focus on lower-volume models.

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However, Ford chief communications officer Mark Truby declined to commenton exact plans or intentions. “We are executing our Ford Plus plan to transform the company and thrive in this new era of electric and connected vehicles. We would not comment on speculation,” he told Bloomberg in an emailed statement.

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Ford CEO Jim Farley makes no secret that he is a fan of Tesla and its leader Elon Musk. “I really admire, frankly, the difficulties they had and the way they managed those difficulties into the success they had,” he told Bloomberg TV’s Emily Chang in a recent interview.

Of course, when evaluating Ford as a possible portfolio investment, there’s also the fact — which is difficult to ignore — that it remains one of only two U.S. auto manufacturers to have never gone bankrupt.

The other one? Tesla.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

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