[ad_1]
Shares of Ford Motor Company (NYSE: F ) fell 5% on Thursday. The stock is down 46% this year. Ford, a leader in the auto industry, is changing its strategy and adapting to new trends in the space. The company sees electrification, software and autonomy as the three main forces changing the industry. Here’s a look at some of its efforts and thinking in these areas:
Electric vehicles
Ford is seeing significant success with its electric vehicles. In November, EV sales jumped 103% compared to last year, putting Ford just behind Tesla (NASDAQ: TSLA ) as the best-selling brand and manufacturer of EVs. Ford’s EV sales expanded to approx. twice the overall EV segment rate in the month.
The F-150 Lightning is the best-selling electric truck while the Ford E-Transit holds a market share of 80% in the commercial EV industry. Mustang Mach-E sales in November were up 14.6%. Ford’s share of the EV segment expanded by about 2 percentage points over the past year and stood at 8.6% in November.
Ford aims to produce 600,000 EVs by the end of next year and 2 million by 2026. At an analyst event last month, the company said cost, infrastructure and battery materials are the main bottlenecks holding back EV adoption. Ford noted that companies that have built charging networks and created stable battery supply chains will be successful in this space.
Autonomy and software
In the third quarter of 2022, Ford made an important shift in its autonomous vehicle strategy. It decided to wind down its Argo AI business as it failed to attract new investors. Argo was created for the development of Level 4 advanced driver assistance systems (ADAS). While the company remains optimistic about Level 4 autonomy, it believes there is still a long way to go before profitable, fully autonomous vehicles become a reality.
At its analyst event, Ford said that even if L4 vehicles were built, they would be very expensive and require maintenance. In addition, it will take time to use them in all kinds of weather conditions.
Instead, Ford will focus on developing L2+ and L3 systems that will provide customer benefits, fuel adoption and expand revenue and profit possibilities. The company believes there is a large addressable market and potential for high-growth new revenue streams tied to Level 3.
At its analyst event, Ford said software is the biggest change in the industry. It said that software in today’s cars takes over some functions that used to be done mechanically and that this software is distributed by suppliers. The company believes that over time software will define the product for customers.
Click here to read the full transcript of Ford’s Q3 2022 earnings conference call
[ad_2]
Source link
