Ford Won't Blink To Shutter Chinese EV Business If This Happens, Jim Cramer Thinks

Jim Cramer applauded Ford Motor Co. F CEO Jim Farley's China strategy and also made a bold prediction regarding the same.

The CNBC host said it was brave on the part of Farley to recognize that the China electric vehicle market is a lot harder to penetrate than originally thought.

The Ford CEO said in an interview with FT this week that there is no guarantee that Western automakers can prevail in China ahead of popular domestic electric vehicle makers such as Warren Buffett-backed BYD Company Limited BYDDY BYDDF and Great Wall Motor.

An Investing Club article shared by Cramer noted that Ford has been struggling in China, posting a loss of $600 million due to increased investment in EVs. Ford's ICE business and the Lincoln luxury brand are both profitable in China, it noted. The report also cited local media reports that said Ford is looking to cut 1,300 jobs in the region.

Farley said on the first-quarter earnings call that Ford is looking at a much lower investment, leaner, more focused business in China with higher returns.

"While Ford will still have a presence in China as it develops EV batteries and learns from China's digitally savvy EV consumers, we're confident that it won't hesitate to step away if it turns into a money-losing operation," Cramer said.

In premarket trading on Thursday, Ford shares rose 0.52% to $11.56, according to Benzinga Pro data.

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