Ford Is Broken, Again

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Ford’s (NYSE: F) earnings report outlined its vision for the future. CEO Jim Farley said, “For me, personally, the most exciting upsell opportunity is really the long-term subscription and digital experience for the customer.” Since there is no evidence this is what drivers want, it is not much to stake the future on. But Farley has had long-term plans that have fallen apart before. His other plan is the Fathom smallish EV, which will not be on the market until next year. Ford thinks it can sell 100,000 in the first year. Of course, there is no reason to think that forecast has any value.

Ford posted good results in the most recently reported quarter. It did so because it is a fossil-fuel vehicle company. Americans are still in love with these. EV sales as a percentage of new car sales in the US are about 6% this year.

Ford points to its F-150 as a key to the future. It is America’s best-selling vehicle and accounts for over a third of Ford’s sales. A full-sized pickup is about as far from an EV as one can get. Ford also pointed to its overseas sales future. It sells very few cars in the EU and China, the two largest car markets other than the US.

Notably, Ford did improve its guidance.

As for its core car business, the WSJ pointed out, “Ford Motor reported lower profit and revenue in the third quarter, pressured by persistent losses in its electric-vehicle unit and softer sales across its gas and hybrid models.”

Revenue fell from $50.5 billion last year to $49.5 billion. EPS dropped from $ 0.61 to $ 0.51. Its EV segment continues to bleed money, with a loss of $1.1 billion, “as the segment continues to optimize first-generation vehicles for profitability….” It also pointed to plans for Fathom and Ford Energy, which may be its one future success.

In the last five years, Ford’s stock is down 30% while the S&P is up 68%. That is the real measure of Farley’s time as CEO. His visions for what comes next for Ford haven’t helped the stock in the past.

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