What Ford’s buoyant quarterly sales reveal about progress toward its ambitious EV goals
Club name Ford (F) reported strong quarterly vehicle sales on Thursday, boosting our confidence in the company’s transformational strategy to support its electric vehicle future. Ford reported second-quarter US vehicle sales totaled 531,662 vehicles, up 9.9% from a year earlier, the second straight quarter of growth. These increases were driven by a 34% increase in F-Series truck sales. Sales at its core internal combustion engine vehicle division rose 10% in the second quarter. Sales of electric vehicles fell 2.8 percent to 14,843 units in the second quarter. Sales of the F-150 Lightning pickup jumped 119% in the second quarter. But limited supplies of the Mustang Mach-E SUV drove sales down about 21 percent. Notably, Ford EV sales are up 11.9% year-to-date, and total sales of more than 1 million units in 2023 are up 10%. Despite strong quarterly sales, Ford shares fell more than 2.5 percent to below $15 a share. However, the stock is still up 28% year-to-date and has really started to rise since its lows in May. F Year-to-date Ford’s year-to-date performance The auto industry has been in less trouble than expected this year due to rising inventories. Supply chains are finally starting to run more smoothly; consumer demand for cars remains high despite rising interest rates. Other leading automakers also reported strong quarterly sales this week. General Motors (GM) said Wednesday that total U.S. vehicle sales rose nearly 19% to 691,978 vehicles in the second quarter. Like Ford, GM is also working to accelerate production of electric vehicles. However, GM’s second-quarter EV sales fell 32% to 15,652 vehicles. Tesla (TSLA) announced on Monday that global vehicle deliveries reached a record 466,140 vehicles in the second quarter, which did not compare favorably with figures from Ford and General Motors (in the US only). Still, Tesla’s 83% quarter-over-quarter growth provides a directional benchmark. Bottom Line Ford delivered solid second-quarter results, but we weren’t surprised the stock fell, dragged down by the broader market slump on Thursday. While U.S. electric vehicle sales were down slightly in the quarter, it was encouraging to see continued momentum in the segment and more inventory availability. Ford’s strong sales in the first half of the year came amid tougher credit conditions. With the Federal Reserve set to resume rate hikes later this month after pausing hikes in June, it may be more challenging for consumers to secure auto loans with higher interest rates and stricter lending standards. Ford has tackled production challenges while growing its electric vehicle business. In February, the company had to issue a cease-and-desist order and halt production of its F-150 Lightning due to potential battery issues. It can quickly be restored and revamped for production. Ford also dealt with a planned outage at a plant undergoing an overhaul aimed at ramping up Mach-E production. On a positive note, Ford announced in May that it would partner with Tesla to provide its EV customers with access to more than 12,000 Tesla Superchargers across the US and Canada. Ford, the second-largest electric car maker behind Tesla, hopes to produce more than 2 million electric vehicles by the end of 2026. Last month, the Energy Department announced plans to provide Ford with a record $9.2 billion loan to develop three new battery manufacturing plants. During the company’s Capital Markets Day in May, Ford announced strategic deals with some of the world’s biggest lithium producers to increase the stability of its electric vehicle production. Scale and lower battery costs are the two drivers behind Ford’s 8% earnings before interest and tax (EBIT) margin by the end of 2026. The company also expects full-year 2023 adjusted free cash flow of $6 billion, compared with analyst estimates of around $3.4 billion. Overall, Ford’s moves under CEO Jim Farley appear to be paying off, and we’re pleased to see the automaker keep attracting new hires and customers to its stellar lineup of vehicles. (Jim Cramer’s charitable trust is Long F. For a full list of stocks, see here.) As a subscriber to Jim Cramer’s CNBC Investing Club, you’ll be at Jim Cramer gets a trade alert before he makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling stock in his charitable trust portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after sending out a trade alert before executing the trade. The investment club information above is subject to our terms and conditions and privacy policy and our disclaimer. No fiduciary duty or obligation exists or arises upon your receipt of any information in connection with Investment Club. No specific results or profits guaranteed.
A full view of the Ford Transmission Assembly Plant in Hallwood, UK, after Ford announced on 18 October 2021 a £230 investment in Hallwood, UK.
Christopher Furlong | Getty Images
Resilient quarterly car sales brought on by club names Ford (F) Thursday reinforced our confidence in the company’s transformation strategy to support its electric vehicle future.
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