Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Long Ideas

Is Ford (F) the best way to Invest in Electric Vehicles?

Ford (F) could be the best stock for electric vehicles (EVs). I think Ford has a better line up of electric vehicles (EV) than the overpriced Tesla (TSLA).

Yet Mr. Market was paying $8.74 for Ford (NYSE: F) on 17 November 2020. In contrast, Mr. Market paid $440.41 for Tesla Motors (NASDAQ: TSLA) on the same day.

I think Ford’s electric lineup is better than Tesla’s because they compose it of vehicles ordinary Americans might drive. For example, Ford’s first EV is the Mustang Mach-E.

The Mach-E is an electric crossover version of Ford’s classic muscle or sports car. CNBC claims the Mach-E can accelerate from 0 to 60 miles per hour in three minutes The Mach-E generates 459 horsepower had 612 pounds of Torque. CNBC claims the Mach-E could be faster than a Porsche Macan Turbo or the Mustang Shelby GT500.

Ford Builds the Cars America Wants: Trucks  

The Mach-E is a sport utility vehicle (SUV) or Crossover. SUVs are the best-selling vehicle class in the United States. The New York Times estimates SUVs comprised 47.4% of the new autos sold in the United States in 2019. In contrast, Sedans made up 22.1% of the new vehicles sold in the US in 2020.

Ford’s management is smart to build an electric SUV and smarter not to plan an electric Sedan. However, Tesla’s principal product, the Model 3, is a Sedan, and Tesla’s signature car the Model S is also a Sedan. Note: Tesla manufactures two SUVs the Model Y and the Model X.

Thus Ford (F) builds the cars America wants and Tesla does not. For instance, Statista estimates Americans purchased 305,230 autos and 1.05 million “light trucks” (pickups, vans, and SUVs) in September 2020.

If Statista is right, Americans buy three “light trucks” for every car. I classify the first three EVs Ford plans as “light trucks.” In addition to the Mustang Mach-E, Ford plans an electric cargo van and an electric pickup.

Ford Could Dominate Electric Vans

Ford’s second EV will be an all-electric version of the world’s bestselling cargo van the Transit. They plan to release the 2022 E-Transit in 2022, a press release indicates.

E-Transit options could include a 2.4 kilowatt mobile generator, and the SYNC 4, which allows fleet owners to manage the charging of the E-Transits. An interesting feature is Pro-Power, which allows workers to power tools or computers from the E-Transit’s battery. The E-Transit motor will offer 256 horsepower/198 kilowatts of power, and 317 pounds of torque.

E-Transit options could include a 2.4 kilowatt mobile generator, and the SYNC 4, which allows fleet owners to manage the charging of the E-Transits. An interesting feature is Pro-Power, which allows workers to power tools or computers from the E-Transit’s battery. The E-Transit motor will offer 256 horsepower/198 kilowatts of power, and 317 pounds of torque.

The Ford Transit is North America’s bestselling commercial van, Torque News estimates.

Ford E-Transit

The E-Transit will offer the same cargo dimensions; 487.3 square cube feet of cargo space, as the diesel Transit van. The standard E-Transit can haul up to 3,800 pounds of cargo. The cutaway E-Transit could carry up to 4,290 pounds of cargo.

I think the E-Transit could be a huge seller because e-commerce is increasing the demand for vans. For example, Amazon (AMZN) plans to buy 100,000 electric delivery vans by 2030, CNBC reports.

There could be many uses for the E-Transit including passenger vehicles, motorhomes, ambulances, and work vehicles. The E-Transit will be available with three roof heights and three body lengths, Ford predicts. I think there could be an enormous demand for the E-Transit as pressure for organizations to adopt no-emission vehicles grows.

Ford claims the E-Transit can charge to achieve a 30-mile range in 10 minutes and 45-hours miles in 10 minutes.

How Ford Will Dominate Electrics with the F-150

Ford’s secret weapon in the electric vehicle wars is the same weapon it uses to win the regular vehicle battles; America’s most popular vehicle, the Ford F-150 pickup truck.

Ford (NYSE: F) sold 896,526 F-150s in 2019, Torque News estimates. In addition, Ford’s commercial truck sales grew by 10.1% in 2019. The F-Series has been America’s best-selling pickup brand for 43 years.

The electric F-150 will be a serious work truck built for hauling, CNBC predicts. “While all other electric pickups are competing for lifestyle customers, the all-electric F-150 is designed and engineered for hard working customers that need a truck to do a job,” Kumar Galhotra says. Galhorta is Ford’s president of the America’s and international markets.

Ford hopes to roll the electric F-150 out by mid-2022, Elektrek claims. They delayed the all-electric F-150 because Ford is building a new electric pickup truck factory in Dearborn, Michigan. The all-electric F-150 will be the first all-electric Ford built from the ground up in the United States. They are building the Mustang Mach-E in Mexico.

Will Ford and VW could Dominate Electrics

Ford’s management thinks demand for EVs could be high. Ford CEO Jim Farley is interested in building a Ford battery factory, CNBC claims. Hence, Ford hopes to copy Tesla and Volkswagen’s (VWAPY) gigafactory strategy of building lithium batteries in house.

Ford and Volkswagen AG have a partnership to develop EVs and autonomous vehicles. The partnership gives Ford access to use Volkswagen’s Modular Electric Toolkit (MEB), a press release states.

I have to wonder if Ford and VW will build a North America gigafactory to produce batteries to power their vehicles. Volkswagen is producing batteries at its Salzgitter plant in Germany, Electrive reports. VW plans to produce enough batteries to produce batteries to contain 16 Gigawatts of electricity (16 billion watts electricity.

Volkswagen and Swedish battery manufacturer Northvolt plan to build to build a €900 million ($1.067) billion gigafactory battery plant, Electrive reports. Volkswagen is using Northvolt’s battery technology in Salzgitter. The Northfolt gigafactory will be in Skellefteå, Sweden.

I think Ford and Volkswagen could dominate the US electric vehicle market because VW’s Electrify America scheme will spend $2 billion to build an electric car charging network across the United States. I think Ford could use Electrify America’s network to power its vehicles.

Electrify America will build level two charges 17 American metro areas and along interstate highways.

Is Ford Making Money?

Ford (NYSE: F) makes enormous amounts of money. For instance, Ford reported quarterly revenues of $37.501 billion, a quarterly gross profit of $6.278 billion, and a quarterly operating income of $2.351 billion on 30 September 2020.

Impressively, Ford reported a quarterly operating cash flow of $11.088 billion and a quarterly investing cash flow of $1.345 billion on 30 September 2020. In contrast, Ford reported a quarterly ending cash flow of -$6.709 billion and a quarterly financing cash flow of -$19.360 billion.

I think Ford has the resources to dominate electric vehicles because it had $44.831 billion in cash and short-term investments on 30 September 2020. Moreover, Ford had $259.943 billion in total assets on 30 September 2020.

Thus, I predict Ford could be America’s top electric company soon. Plus, investors need to investigate Ford because of the cash, and the low price. Finally, Ford (F) is an electric vehicle maker that pays a dividend. Ford shares paid a 15₵ quarterly dividend on 29 January 2020.

If you want an electric vehicle maker with a high margin of safety, Ford (NYSE: F) is an excellent choice. I predict Ford’s electrics will not be as sexy as Tesla’s; or as ugly as the Cybertruck, but they will make money. I think Ford will make money because it will build electric vehicles actual people will want to drive.

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