F

Ford Motor Company

12.28
USD
-1.86%
12.28
USD
-1.86%
10.61 25.87
52 weeks
52 weeks

Mkt Cap 49.09B

Shares Out 3.92B

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This Company Just Increased EV Sales by 176% in July

When many investors think of electric vehicle (EV) stocks, they likely think of the industry's pioneer, Tesla, leading Chinese players like Nio or perhaps U.S. upstarts like Lucid Group. But guess which of these EV companies increased its EV sales by a whopping 176% in July? It's a trick question -- it wasn't any of these companies. It was none other than legacy big three automaker Ford Motor Company (NYSE: F). Electric surge Ford looks like it's firing on all cylinders, according to its July sales numbers: Total vehicle sales increased by 36.6% and EV sales by 176% compared to last July. These numbers are coming off a low base, as the company sold 7,700 electric vehicles in July, but they show that it's gaining some serious momentum in this category. Ford's EV sales for 2022 now stand at 30,648, with five months left to go in the year. One number stands out even more: Overall auto sales declined by 10.5% in July, according to estimates by Cox Automotive. This means that Ford's products are in demand even as the overall vehicle market is tepid, and that Ford is taking share from competitors. Ford estimates that it now has about a 10.9% market share in EVs in the United States, its highest share ever. Ford CEO Jim Farley said on the second-quarter earnings call: "We believe that these great new products will help us to grab an outsized share of the rapidly growing EV market, combined with our healthy and vibrant shares of our ICE [internal combustion engine] and growing hybrid markets." Ford is gaining traction in the EV market by producing electric versions of its most popular vehicles, which looks like a wise strategy. The F-Series is already the best-selling vehicle in the United States, so why not build on this popularity with the electric F-150 Lightning? Similarly, the Mustang is an iconic American muscle car, so the electric Mustang Mach-E has instant appeal to many drivers, and is Consumer Reports' top electric vehicle for 2022. And it's not just the everyday consumer market that Ford is electrifying: Ford's Transit van has long been a mainstay for commercial fleets, and its electric version, the E-Transit, is so far lapping the field in the nascent market for electric work vehicles. Furthermore, the company also recently unveiled the Ford F-150 Lightning Pro Special Service Vehicle, which is specifically tailored for use by police departments, 12,000 of which Ford currently counts as customers. The market is taking note The market seems to be taking notice of Ford's success in EVs finally. Shares are up 40% over the past month, and July was the stock's best month since the Great Recession. But this doesn't mean that it's too late to invest in Ford. Even after this scorching hot July performance, shares are still down 24% year to date and 40% off of their 52-week high. They trade at a price-to-earnings (P/E) ratio of just 5, which is far cheaper than the broader market. Some discount is warranted, as the auto industry is cyclical, and the economy is in the middle of a period of uncertainty. Furthermore, the auto industry is trying to work through supply chain challenges that have dogged it since the pandemic. It should be noted that Ford's stock has underperformed the broader market for decades and that there have been plenty of 'false starts' before. But with the stock's current P/E and dividend yield -- nearly 4% after the company just increased its dividend by 50% -- it looks like a good value if CEO Jim Farley can continue to execute on his turnaround plan and if the market begins to reevaluate Ford based on this progress. Can Ford's stock keep its foot on the gas? Ford has an attractive lineup of electric vehicles hitting the market and finding early success with consumers, so things are looking up. Its stock is a unique way for investors to gain exposure to electric vehicles, with a profitable company that trades at an attractive valuation and pays out a significant dividend. 10 stocks we like better than Ford When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Ford wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of July 27, 2022 Michael Byrne has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nio and Tesla. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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