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CONSUMER CYCLICALS: Ford (F Ba1/BBB-/BBB-): Moody’s Opines on EV Strategy

CONSUMER CYCLICALS
  • Ford announced changes to its EV strategy yesterday (details here https://marketnews.com/consumer-cyclicals-ford-f-ba1-bbb-bbb-ev-pivot).
  • Moody’s welcomes the clarification of its strategy. It recognises the commercial logic and believes local battery production plans will lower costs.
  • Nonetheless, it sees the move as credit negative with cash costs of up to $1.5bn adding to its EV transition spend.
  • The move makes sense to us short term and Ford has maintained flexibility in its approach to EVs. Ultimately this decision will be judged on the pace of EV adoption from here, which in turn may hinge heavily on the outcome of the US presidential election.

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