4 months ago • 2 mins
What’s going on here?
Ford reported impressive quarterly results this week – but its EV business is looking a little lost.
What does this mean?
Ford was all revved up about its ambitious EV goals not so long ago – but it’s finding out that there’s a big difference between mapping out a route and actually hitting the road. See, the adoption of its EVs isn’t accelerating as expected. Add on the industry’s all-out price war, and the firm’s been slashing prices to keep up, which has inevitably bitten into profit too. The result: Ford’s bracing for EV losses to double this year from last, and it’s slowing its electric rollout to stem the bleeding. Luckily, though, some cars are picking up the slack – namely, good old gas guzzlers. Thanks to robust demand, those traditional rides drove overall results beyond expectations. But investors, not electrified by the low-voltage EV performance, still responded by offloading stock.
Why should I care?
The bigger picture: Getting overlapped.
Ford isn’t the only one struggling to keep up with EV market leader Tesla. Even German heavyweights like Volkswagen, BMW, Mercedes, and Porsche are eating dust, with their combined EV deliveries still trailing Tesla’s 890,000 in the first half of the year. And as Tesla pushes more cars with price cuts, the gap’s only widening, putting the squeeze on legacy carmakers. Not bad considering that Tesla’s most recent passenger offering, the Model Y, was launched way back in 2020.
Zooming out: Silk Road detour.
China is the ultimate prize for firms in the EV space – and Volkswagen thinks one of the world’s biggest car manufacturers and the world’s biggest car market should really be like peas and carrots. So after a sales dip in China, it’s switched gears and announced plans to invest almost $1 billion in Chinese upstart Xpeng. The goal: to jointly develop EVs in China and put the brakes on Volkswagen's slide in the country.
All the daily investing news and insights you need in one subscription.
Learn MoreDisclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.
/3 • Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.