Home » Ford Knows It Can’t Survive On Just Gas-Powered Trucks And Mustangs

Ford Knows It Can’t Survive On Just Gas-Powered Trucks And Mustangs

Tmd Ford More Than Trucks Ts
ADVERTISEMENT

Ford joined other companies in putting out its third-quarter financials yesterday, and the numbers are up year-over-year, but the medium-term guidance is a little mixed. If you’re going to bet on Ford you’re wagering the company is going to be a better one in two years. This is different from General Motors, which is doing quite well right now. Ford, at least, is in better shape than Stellantis, which has no timeline that makes sense.

Today’s Morning Dump will focus on the future. Ford has one. But does Polestar if it can’t sell cars in America? That’s what might happen under new Commerce Department regulations. Lucid will fare better, as it builds its vehicles in America, but is the Gravity enough to save the company?

Vidframe Min Top
Vidframe Min Bottom

If your friends are like my friends, they’re currently losing their minds over this or that poll. Most of these don’t matter. A poll of whether or not Michigan voters think the Federal government should subsidize the retooling of a plant in Lansing to build EVs for Cadillac is kinda interesting though.

Ford Is Holding Out For 2027
Jim Farley Ford

A friend of mine has lived outside of New York City for years and has always said that his medium-sized town is the “city of the future.” He’s been saying this the entire 16+ years that I’ve known him. It was a bit of a joke for a long time as you can’t be the “city of the future” forever.

I feel the same about Ford. The company is in decent shape and has been for a long time. An investment in hybrids and small trucks have been paying off, and Ford announced yesterday that it even slightly beat expectations in the third quarter on both revenue and operating profits.

ADVERTISEMENT

So why is the company’s share price dropping today? Ford had to revise down its full-year earnings (EBIT) forecast from a projection of $10-12 billion down to $10 billion. In general, things seem a bit vague for the present.

From Reuters:

“During the call, we sensed a tactical turn in the focus of management as they try hard to get through the remainder of the year and look towards an increasingly uncertain 2025,” Bernstein analysts said.

What happened? Here’s Ford CFO John Lawler talking to investors on the earnings call:

[T]wo gating factors keep us from a record adjusted EBIT this year: higher-than-expected warranty costs and the impact of inflation at our JV, Ford Otosan in Turkey, which increases the material cost of Transit vans sold in Europe.

While inflationary pressures in Turkey is outside of our control, increased warranty costs are within our control. We now expect full-year company adjusted EBIT of about $10 billion, which includes lower-than-planned volume in the second half for Ford Pro and Ford Blue due to supplier disruptions. In general, we see supply and demand for vehicles in balance. We continue to expect adjusted free cash flow of $7.5 billion to $8.5 billion with capex between $8 billion to $8.5 billion.

All of this is normal business stuff, and Ford says it hit a dealer inventory of 68 days of dealer stock, which is close to its goal of 50-to-60 days. That’s a good sign when you consider how other automakers, particularly Stellantis, are drowning in inventory right now.

A deeper dive into Ford’s numbers shows where the money is being made: trucks/crossovers and work trucks/vans.

ADVERTISEMENT

Ford Earnings

The above chart from Ford mostly tells the whole story of the present. Ford broke itself into three different divisions:

  • Ford Blue (ICE/hybrid passenger vehicles)
  • Ford Model e (electric cars)
  • Ford Pro (commercial vehicles/service/software)

Ford Blue is by far the biggest revenue pool, which makes sense, and it had an ok quarter as part of a mixed year. But Ford Blue basically makes the Mustang (the company’s only “car”) and a lot of crossover/suvs and trucks.

By far its biggest profit center is its commercial division, even with Turkey’s ongoing inflation. Ford’s electric car division is, as always, still losing money.

What does the future look like? After years of quality problems, the automaker thinks it’s heading in the right direction and says it’s lowering the amount of warranty and recall work it’s doing on new vehicles even with its bigger launches (remember, Ford delayed the F-150 rollout until it felt like the trucks were good enough).

ADVERTISEMENT

But the future is still in the future, and Ford seems to be putting more and more pressure on its “skunkworks” team that’s developing a cheap mid-sized truck and other affordable electric vehicles on a brand new platform. The expectation is that those vehicles will launch in 2027.

Here’s how CEO Jim Farley ended the call when asked about these future plans:

I don’t want to get into too much detail, but I’m really proud that we basically verified the design of each part like a year or two earlier than we normally do. And we verified it from the supplier standpoint and ours by looking at a variety of different suppliers, even challenged our suppliers. And that has been an eye-opening experience for us to see [SIC] what really should cost is on a lot of these advanced components, especially because we think companies like BYD have an incredible advantage on affordability of batteries. So, we have to make that up where our opportunity is on the EV component side, inverters, gearboxes, motors, etc.

And I think it’s a combination of very new approaches to the actual design of the component as well as leveraging new suppliers as well as working way up front on the part design itself to get the cost out using the technology road map of the supplier. And that’s where we’re seeing a lot of the progress. Basically, the answer to your question is we radically simplified the vehicle. Like if you look at the number of parts in the vehicle, it is just a completely order-of-magnitude change.

The assumption is that it’ll be a pure BEV, but something Farley said in response to a tweet by our own David Tracy has me wondering:

Is Ford also developing an EREV a la the new Scouts?

ADVERTISEMENT

There are so many things to look forward to, and Ford needs things to look forward to at the moment. If the company is just making traditional ICE-powered vehicles it’s likely going to be stuck somewhere around its current revenues. The Ford Pro stuff is working out quite well for the company, but there’s probably some upper limit on that.

Ford can’t be the company of the future forever, just like my friend can’t live in the city of the future forever. Of course, the joke’s on me, because now we’re neighbors.

Polestar Says It Might Have To Stop Selling Cars In The United States

2025 Polestar 3 First Drive
2025 Polestar 3 first drive

Sino-Swedish electric carmaker Polestar is in a tricky spot. It’s likely going to survive the new 100% tariffs on Chinese-built vehicles as it ramps up production at its South Carolina facility.

However, the feds aren’t quite done yet. Earlier this year the Department of Commerce said it had some vague plan to do something about connected cars, which turned into a very specific plan to ban connected cars built in China or with specific Chinese-built hardware.

That’s going to be hard on Ford and GM, both companies that are importing cars from China to the United States, but it’ll especially be rough for Polestar:

ADVERTISEMENT

From Automotive News:

The automaker said in comments filed with the Commerce Department that a proposed rule prohibiting Chinese connected vehicles on American roads due to national security concerns would bar the sale of vehicles that Polestar is building in South Carolina as well as those produced in China.

Polestar said a substantial portion of its operations are outside China, while seven of its 10 directors are from Europe or the U.S. and its CEO is German. Polestar said it has around 2,800 employees globally, with 280 in China.

Commerce “should consider whether a rule that effectively shuts down the operations of a lawfully organized U.S. company with substantial U.S. investments and so many personnel and key decision-making units in friendly nations and the U.S. is appropriately tailored to address the stated national security concerns,” Polestar said.

It’s probably not going to be decided by this administration, though I wouldn’t hold my breath that any future President is going to grant a lot of leeway to Chinese automakers.

The Lucid Gravity Will Cost $79,900… Eventually

005 Lm23 C Gravity Frunk Seat Beach Lifestyle 8r0a7342

The new Lucid Gravity SUV looks great and if you want a big, efficient three-row electric SUV thing it’ll probably not be a bad way to go. You just need to be pretty well-off to put down an order because the first version produced, the Grand Touring trim, will cost $94,900 and the base trim will cost $79,900 when it eventually goes on sale.

That’s a lot of car for the money, giving buyers both 800 horsepower and a projected range above 440 miles. By comparison, an all-wheel drive Tesla Model X costs $79,900 and offers just 335 miles of range. The Plaid version costs $94,990.

ADVERTISEMENT

Did you see what Lucid did there? It’s $90 cheaper and offers almost 30% more range. A Long Range RWD Kia Ev9 is cheaper at $59,200, but it offers just 320 miles of range.

Lucid, which loses a ludicrous amount of money on every car it sells, needs the Gravity to be successful. The problem is that the three-row EV space is saturated and I’m not sure it’s the most exciting place to play right now. Even if it’s the best three-row electric SUV I’m concerned that those customers already bought an R1S or a Model X.

Perhaps with its longer range it can start taking on X7 and GLE buyers? Maybe? If you’re Lucid you really need this to frunking work.

Should The Government Pay Companies To Retool For Electrification?

4 Gmfactoryzeropotus031

A new poll from The Detroit News and local TV station WDIV-TV found that voters were fairly evenly split on the idea of spending federal taxpayer dollars on helping General Motors retool its Lansing, Michigan plan to build electric cars.

ADVERTISEMENT

Per The Detroit News:

The survey of 600 likely voters, conducted Oct. 22-24, found that about 46.1% of voters oppose the Biden administration’s $500 million grant for converting GM’s Lansing Grand River Assembly plant to an EV plant, while 45.6% said they support it.

The narrow gap — even narrower than the overall statewide gap between Democratic presidential nominee Kamala Harris and Republican nominee Donald Trump — reflects how strongly the topic of EVs has become tied to presidential politics in automotive-heavy Michigan.

“The conversation about electric vehicles has been fully engulfed by the political campaigns,” said pollster Richard Czuba, founder of the Glengariff Group, a Lansing-based firm that conducted the poll.

There’s some fun nuance in this poll and I appreciate the pollster trying to remove the politics from it and asking voters to choose between two different statements about supporting electric car production:

The first choice: “Michigan should focus on building gasoline powered vehicles and the jobs that come with it. If automakers want to build electric vehicles, they should do it somewhere else even if it means those jobs go somewhere else.”

The second: “Michigan should fight to win both gasoline powered auto jobs and electric vehicle auto jobs. Regardless of what kind of vehicle it is, it should be built in Michigan.”

Only 9% of the respondents agreed with the first statement, with 88% agreeing with the second one.

What I’m Listening To While Writing TMD

Many people believed that LCD Soundsystem was a British band, even though they’re proudly from Brooklyn and mostly American. This prompted the great “North American Scum,” so I support the confusion if we keep getting bangers.

ADVERTISEMENT

The Big Question

Ford’s shares were $10.25 in October 1993. They were a little higher at about $11.41 per share in October of 2003. Right now the shares are at… $10.32. What will Ford’s share price be in October of 2028?

Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Subscribe
Notify of
59 Comments
Inline Feedbacks
View all comments
Col Lingus
Col Lingus
10 days ago

Expecting share price to stay in the now historical $10-$12 buck range forever at this point.
Same as it ever was.

Bassracerx
Bassracerx
10 days ago

wait automakers want a bailout to transition to EVs?? Hell no!

TOSSABL
TOSSABL
10 days ago

For a profit center, Ford is still lagging hard on getting the basic work van right. Our fleet is switching over to Fords, and it hasn’t been uneventful. A lot of driveshaft recalls, various electronic fits, etc.
Not a van, but our F450 superdooty stakebody has a habit of cutting completely out when you give it beans just after a sharp right turn—like you do pulling out after filling up. I’ve had a couple near Code Browns in it myself Likewise the newer F450 plumbers’ truck will just stop after a pothole sometimes. Towed twice so far.

-no predictions as to stock price. If I could do that, I wouldn’t be hiding in the shade on a roof right now

Davey
Davey
10 days ago

I don’t know how Ford survived this long with their QC. I love Ford ideas: maverick, aluminum truck bodies, etc. But damn none of the Ford’s we’ve had ever made it past 200,000 klms lolll I just can’t give them my money anymore

Vic Vinegar
Vic Vinegar
10 days ago
Reply to  Davey

Yeah if I had confidence in the quality, I’d consider the Explorer and Maverick for my household. But my local Ford dealer seems scummy and my 11 year old car doesn’t give me any problems. I don’t want to buy a new car that does give me problem. I’ll just keep waiting for Toyota to have inventory I guess.

Ben
Ben
10 days ago

Of course, the joke’s on me, because now we’re neighbors.

So it was the city of your future. 🙂

Harvey Firebirdman
Harvey Firebirdman
10 days ago

On the Polestar topic wouldn’t the same thing effect Volvo badly also? Seeing they are owned by the same company and share a lot of things between products.

Mrbrown89
Mrbrown89
10 days ago

It may impact since they share the same infotainment system just recently, Polestar started and then Volvo migrated to the same Android OS thing. I am 99% sure that connectivity is the same unless Volvo created their own supply but doesn’t make sense. I dont believe the government will proceed with this, they want to target specific OEM from China, Volvo and Polestar have investments in the US. They may have exceptions.

Mrbrown89
Mrbrown89
10 days ago

Oh Polestar, what an experiment for the almost 3 years with my lease. Good looking car, amazing driving characteristics, but you were born at the wrong place and at the wrong time. You should stayed at your parents house (Volvo) and not going independent, not on this economy.

Mechjaz
Mechjaz
10 days ago

Investors: we demand lower warranty costs!
Ford: *spends money on quality process, line doesn’t go up as much*
Investors: not like that!

Mechjaz
Mechjaz
10 days ago

I was just thinking about LCD Soundsystem the other day, and how I really wish someone would take the microphone away from that guy. His confused, arrhythmic shout-talking is absolute grating.

It’s not as bad as Paradise City in Burnout Paradise, but that’s only because Daft Punk Is Playing at My House was one of a rotation of songs that played in the Forza Motorsport 2 menu.

World24
World24
10 days ago

With the Ramcharger coming back, I’d be shocked if Ford wasn’t thinking about doing an EREV.
It’s honestly surprising they didn’t unveil one first.

Ben
Ben
10 days ago
Reply to  World24

One positive of Stellantis dragging their feet on electrification is that they had a chance to see which way the wind was blowing before they jumped in. Ford and GM both went all-in on EV trucks and now will have to pivot pretty hard to reach the PHEV truck that they should have built in the first place.

Scoutdude
Scoutdude
10 days ago
Reply to  Ben

Ford did plan to have a PHEV F-150 follow up to the HEV F-150 but of course all the EV mandates meant the focus shifted to the Lightning.

No Kids, Just Bikes
No Kids, Just Bikes
10 days ago

Here I thought LCD Soundsystem was just one dude. They’re more like American predecessors to the Viagra Boys, eh?

Noahwayout
Noahwayout
10 days ago

LCD Soundsystem is electro-rock. Viagra Boys and straight up post-punk. Love them both but they don’t have much in common to my ear.

Last edited 10 days ago by Noahwayout
No Kids, Just Bikes
No Kids, Just Bikes
10 days ago
Reply to  Noahwayout

I get that, but the VBs are a lot more electro than most of the punk I listen to. In any case I think they’re about the best thing out right now.

Canopysaurus
Canopysaurus
10 days ago

After we punitively bomb North Korea for wading into Putin’s Ukrainian land grab and – because he’s crazy and suicidal- Kim Jong Un hits back with his only functioning nuclear missile by targeting Tokyo, and Russia, having signed a mutual defense pact with N.Korea, illogically responds by attacking Finland, which brings NATO hauling ass full steam, and Israel decides to permanently settle its differences with Iran and its proxies by glassing the sands of their countries, and China and the U.S. sink each other’s Pacific fleets in 30 minutes over a Philippine trawler ramming and China’s use of Russian little green men to covertly invade Taiwan, and we’re stuck with Kamalump leadership (not sure who wins next week, so combining the two) fretting about joy and the “enemy within” … you get the idea. I’d be cautious on Ford stock predictions.

Jatkat
Jatkat
10 days ago
Reply to  Canopysaurus

wat.

My Goat Ate My Homework
My Goat Ate My Homework
10 days ago
Reply to  Jatkat

TLDR/ The drug epidemic is still a problem.

SarlaccRoadster
SarlaccRoadster
10 days ago

waat?? I thought Jared Kushner fixed that a long time ago!
/s

Pupmeow
Pupmeow
10 days ago
Reply to  Canopysaurus

Eh. I think it’s all gonna work out. For Ford.

Icouldntfindaclevername
Icouldntfindaclevername
10 days ago

Curious, I wonder how often an Automotive CEO replies to a journalist on X
Besides Muskrat

Parsko
Parsko
10 days ago

OBOG???

$10.69

41 was already taken. Don’t trust the stock market to keep going up and to the right forever. Why is all my retirement in there????

Fuzzyweis
Fuzzyweis
10 days ago

It just shows how much a sham the stock market is, the company with the #1 selling vehicle for decades is at $10, the company that shows off 2 seater taxis is at $250.

Wish more car makes would go private, having to report every quarter why the stock dipped 3 cents doesn’t give much room to experiment.

Parsko
Parsko
10 days ago
Reply to  Fuzzyweis

Plenty of room, they are just cowards to admit there may be a quarter or two when the slope is NOT positive.

My Goat Ate My Homework
My Goat Ate My Homework
10 days ago
Reply to  Fuzzyweis

Don’t focus on share price. It’s really market cap that is the shocker.

Ford could do a 20/1 reverse split and have $200 shares tomorrow.

Pupmeow
Pupmeow
10 days ago

True, but Tesla’s market cap is like 20X Ford’s. So the underlying point remains.

Óscar Morales Vivó
Óscar Morales Vivó
10 days ago
Reply to  Pupmeow

Tesla is at least 50% a meme stock at this point. They don’t seem to have any viable new product in the pipeline so eventually the slope will have to adjust to reality.

My Goat Ate My Homework
My Goat Ate My Homework
10 days ago

I’ve been calling it a meme stock and a dotcom stock, rolled into one.

But, it never seems to correct fully. Just not sure what is going to take before that happens. Either it will happen, or they will eventually find some revenue stream to support that valuation.. And that would be amazing.

My Goat Ate My Homework
My Goat Ate My Homework
10 days ago
Reply to  Pupmeow

That’s why I said “It’s really market cap that is the shocker”.

They were pointing to the wrong thing to actually make their point. It’s like claiming that a person with $100 bills has more money than someone with $20s.

Pupmeow
Pupmeow
10 days ago

I completely misread your comment, sorry! I agree with you.

Ranwhenparked
Ranwhenparked
10 days ago
Reply to  Fuzzyweis

Ford also has 4 billion shares, Tesla has 3.2 billion. Yeah, that doesn’t change the math that much on valuation, but it has some impact

My Goat Ate My Homework
My Goat Ate My Homework
10 days ago
Reply to  Ranwhenparked

making accurate statements matters. I’m just tired if people pointing to something and pretending that it means something else.

Pointing to share price when (probably) referring to market cap is just ignorant. Or, worse they mean what they said and maybe they just got lucky.

Like, oh, look at Wolfspeed inc. their shares are $15 that’s crazy compared to Ford @$10. The market is a sham.

edit: for the record, the market IS a sham for some stocks.

Last edited 10 days ago by My Goat Ate My Homework
V10omous
V10omous
10 days ago

Given that Grand River Assembly currently produces the Blackwings, I’m firmly opposed to converting it to EV manufacturing.

Surely they can find somewhere else.

Musicman27
Musicman27
10 days ago
Reply to  V10omous

GIVE ME BLACKWINGS OR GIVE ME DEATH!!!

Nathan
Nathan
10 days ago
Reply to  V10omous

Production of the Camero at Grand River ended in December 2023 so there is a lot of spare capacity not being used by only producing Cadillacs.

SarlaccRoadster
SarlaccRoadster
10 days ago
Reply to  V10omous

They should have the entire plant build just Blackwings, their dozens of sales would surely keep them afloat! 😀

Lockleaf
Lockleaf
10 days ago

Don’t forget that their stock has split in that time, so its not just a flat investment.

Spikersaurusrex
Spikersaurusrex
10 days ago
Reply to  Lockleaf

The last split was in 2000 and it was about 1.75 to 1. The comparison to 2003 is valid, but the comparison to 1993 is not. For what it’s worth, the 52 week high is $14.85. It’s been a bit of a volatile year.

V10omous
V10omous
10 days ago

The price given in the article accounts for splits, so the nominal value in 1993 must have been higher.

https://www.tradingview.com/symbols/NYSE-F/

Spikersaurusrex
Spikersaurusrex
10 days ago
Reply to  V10omous

Interesting, I didn’t see that. Thanks for clarifying.

DONALD FOLEY
DONALD FOLEY
10 days ago
Reply to  Lockleaf

Owning Ford stock pays dividends.

DadBod
DadBod
10 days ago

I lemoned a perfectly good Lightning because a part was backordered for 6 months. Ford… sigh.

Musicman27
Musicman27
10 days ago
Reply to  DadBod

Ford: Found On Road Dead, Driver Returned On Foot.

SaabaruDude
SaabaruDude
10 days ago

I have no frunking clue what anyone’s share prices will be 4 years from now.

DadBod
DadBod
10 days ago
Reply to  SaabaruDude

There might not even be a stock market!

Eddie Wuncler
Eddie Wuncler
10 days ago
Reply to  SaabaruDude

I have ~300 shares across multiple counts with an average cost of like $9. It’s my own fault, not only for investing at the top, still believing in this shit and doubling down, but that I still purchase shares to bring the average down. There’s still hope that they get bought by Toyota or something though, as I am convinced Lucids tech and Toyotas production capabilities are the only way out

Ben
Ben
10 days ago
Reply to  SaabaruDude

If you did then 4 years from now you’d be filthy rich. Trying to predict the market is a fool’s game, especially as a retail investor.

Alexk98
Alexk98
10 days ago

Fords stock will likely stay within 20% of what it is for the next four years, if not longer. Quality issues have not been resolved in the past 4 years since COVID hit like they’ve hoped, their EV/Hybrid line doesn’t seem to be moving the needle much, and they’re banking somewhat on a Lincoln revival that will live or die by tariffs on Chinese made vehicles, whether EV or ICE/Hybrid.

Ford is perpetually in an equally good and bad place that is the epitome of legacy Detroit automakers. The Ford product portfolio right now seems to be good, but hasn’t done much to change in the past 2-3 MYs, so without refreshes, new models, and an increase in build quality and reliability, Ford will struggle to push their stock price up or even maintain it by October of 2028.

Data
Data
10 days ago
Reply to  Alexk98

Ford’s been promising to fix their quality issues through at least three or four CEO’s over the last 20 years. I’m not holding my breath.

Alexk98
Alexk98
10 days ago
Reply to  Data

Agreed. Throw in the fact that every CEO seems to throw the company behind a different hype-driven *idea* of what the company should be. Farley is a car guy sure, but under him they’ve also started the push to become a “technology company” which is clearly a knee-jerk reaction to Tesla’s growth, and was never going to be a sustainable long term plan.

Ben
Ben
10 days ago
Reply to  Alexk98

I really like Farley and I suspect he’d be a great guy to grab a beer with. I’m not sure he’s the right person to be CEO.

Ranwhenparked
Ranwhenparked
10 days ago
Reply to  Data

Only 20 years? They’ve been hit or miss on that front for ca 55 years at least. Will make a temporary improvement, sometimes on only a few specific models, then backtrack and start over again

Arch Duke Maxyenko
Arch Duke Maxyenko
10 days ago

What will Ford’s share price be in October of 2028? 1 dollar, Bob!

Pupmeow
Pupmeow
10 days ago

I actually misread it as “2008” when Ford’s stock price got preeeeetty close to $1.

Michael Beranek
Michael Beranek
10 days ago

The only product Ford builds that I would even consider is a V8, manual trans Mustang. The rest of it looks like the backlot at a New Holland dealership.
Hey, Ford, are you SURE that buyers don’t want sedans/cars?

Ramaswamy Narayanaswamy
Ramaswamy Narayanaswamy
10 days ago

Their QC is now garbage…and Fords historically have NOT been very appealing for me, UNLESS if it was a Crown Victoria or a 7.3 PS Super Duty/Excursion…

Ranwhenparked
Ranwhenparked
10 days ago

Jim Farley seems to want them, with all his effusive praise for the Xiaomi SU7.

Also, Ford does still sell both the Ford Mondeo and Lincoln Z in China, and they both look decent

59
0
Would love your thoughts, please comment.x
()
x