Ford Motor Company F has been proactively pursuing an electrification strategy, and this has helped the company edge ahead of fellow legacy automakers.
Ford's EV Focus: Realizing that EVs are the future, Ford began plowing billions of dollars into manufacturing plants, technology, batteries and infrastructure. In mid-May 2021, the company said it plans to invest $22 billion in electrification through 2025.
The automaker set out on its pursuit by electrifying its iconic products such as the Mustang, F-150 and Transit. The Mustang Mach-E and E-Transit, an all-electric version of its best-selling van, are already on the market. The company is expected to make its F-150 Lightning EV truck available by spring this year.
Ford disclosed its transformational "Ford+ plan" at its Capital Markets Day on May 26, 2021, wherein it laid out with further clarity its EV roadmap and investments. The company said it will target over $30 billion of investments in EVs by 2025 and expects these vehicles to account for 40% of its global product mix by 2030.
A few months later, Ford unveiled plans to invest $11.4 billion, along with its battery supplier SK Innovation, in building a new plant in Tennessee to manufacture EVs and advanced batteries. Additionally, the companies announced a Battery Park, comprising two battery plants in Kentucky, to supply EV batteries to Ford and Lincoln brands.
At the start of 2022, the company said it plans to double production of its F-150 Lightning EV truck to 150,000 units per year at the Rouge EV center in Michigan. Earlier, citing strong demand for Mustang Mach-E, the company said it will increase production of the model in 2022, with annual volumes expected to hit over 200,000 units by 2023.
As recently as this week, the company announced an ambitious plan to separate its ICE and EV businesses in order to unlock value. The company fine-tuned its product mix expectations, forecasting half of its total 2030 global vehicle volume to be made up of EVs. By 2026, the company expects to produce more than 3 million EVs annually.
Analysts have lauded Ford's brave moves, although challenges abound, as the company has taken a firm step ahead that will pay off in the long run, Morgan Stanley analyst Adam Jonas said in a recent note.
How Ford Stock Fared Since Ford+ Plan Unveil: Ford shares had a fairly decent outing in 2021 but have come under selling pressure since the start of 2022, with extraneous factors contributing to much of the weakness.
Source: TradingView
Ford stock was trading at $12.68 on May 25, 2021, ahead of the announcement of the Ford+ plan. A $1,000 invested in the shares would have fetched roughly 79 shares in the company. Between then and now, the company has paid two quarterly dividends, each amounting to 10 cents per share.
At Friday's closing price of $16.85, the investment will be worth $1331.15. Adding dividends, potential proceeds would be $1,346.95, a return of about 36% on the original investment.
Ford shares closed Friday's session down 4.26% at $16.85.
Related Link: Ford Analyst Downgrades Stock: 'Limited Scope For Positive Surprises'
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