Ford CEO Jim Farley Says Gen-2 Vehicles Will Be Profitable In 'First 12 Months Of Their Launch'
Portfolio Pulse from Anan Ashraf
Ford Motor Co (NYSE:F) CEO Jim Farley announced that the company's next generation of electric vehicles (EVs), referred to as Gen-2 vehicles, are expected to be profitable within the first 12 months of their launch. This profitability is anticipated to lead to mid to high single-digit EBIT profit margins over the vehicles' lifecycle, surpassing the cost of capital for Ford's EV segment, Model E. Despite expecting wider losses for Model E this year, due to pricing pressure and investments in the next generation of vehicles, Ford is committed to launching these Gen-2 products only if they are profitable. Ford shares closed up 4.1% at $12.07 following the announcement.
February 07, 2024 | 5:07 am
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Ford Motor Co's CEO announced Gen-2 EVs are expected to be profitable within 12 months of launch, aiming for mid to high single-digit EBIT margins. Despite wider expected losses for Model E, shares rose 4.1%.
The announcement of expected profitability for Ford's next generation of EVs within the first year of launch, coupled with the commitment to not launch unless profitability is assured, is a strong positive signal to investors. This strategic focus on profitability and sustainable growth in the EV segment, despite the anticipated wider losses for Model E, has likely contributed to the positive investor sentiment reflected in the 4.1% rise in Ford's stock price. The confidence in this analysis is based on the direct correlation between the CEO's optimistic outlook on future profitability and the immediate positive reaction in the stock market.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100