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CONSUMER CYCLICALS: Ford (F Ba1/BBB-/BBB-): EV Pivot

CONSUMER CYCLICALS

Ford keeping its focus on customer demand and profitability. It’s leaning into strength in commercial EVs with customers focused on total costs there, recognising price sensitivity for the marginal consumer currently and demand for hybrids. Seems a sensible move in a fiercely competitive landscape. This is unlikely to be market moving but a welcome development following a disappointing 2Q24.

  • Ford announces adjustments to its EV rollout strategy to reach its goal of positive EBIT within 12 months for all new models.

 

  • The planned fully electric 3-row SUV that was delayed from 2025 to 2027 in April will not be produced. Instead, it will focus on hybrids in this segment. One off costs of up to $1.5bn are expected. Annual EV capex will decline from 40% to 30% of total ($800-900mn difference). 

 

  • A new fully electric commercial van will begin production in 2026.

 

  • Two new fully electric pickups will begin production in 2027. The timing should allow lower cost battery technology to be utilized.
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