Is Ford Stock Worth Buying Now on its EV Strategy Shift?

Core Viewpoint - Ford is shifting its electric vehicle (EV) strategy towards affordability, moving away from high-priced models to a new platform designed for lower-cost EVs, which could significantly alter its position in the EV market if successful [1][3][21]. Group 1: New Strategy and Product Launch - The new strategy is centered around the Ford Universal EV Platform, which will support a range of lower-cost electric models, starting with a midsize electric pickup priced around $30,000, with production set to begin in 2027 [3][11]. - This initiative is backed by a $5 billion investment aimed at creating nearly 4,000 jobs at the Louisville Assembly Complex in Kentucky [3][11]. - Ford's CEO, Jim Farley, has referred to this affordable EV push as the company's next "Model T moment," indicating its potential significance in the automotive industry [4]. Group 2: Production Efficiency and Cost Management - The new platform aims to streamline production by reducing parts by 20%, fasteners by 25%, and plant workstations by 40%, which will cut assembly times by approximately 15% [5]. - The focus on lithium iron phosphate (LFP) batteries, which will be produced in the U.S., is expected to lower costs and enhance vehicle interior space [4][11]. Group 3: Challenges and Market Position - Ford's EV division has incurred approximately $12 billion in losses over the past two and a half years, including $2.17 billion in the first half of this year [7][11]. - In contrast, General Motors has adopted a more gradual approach to EV production, resulting in higher sales figures and a broader range of electric models [8]. - Chinese competitor BYD has surpassed Ford in EV sales, emphasizing the need for Ford to adapt its strategy to remain competitive [9][13]. Group 4: Financial Implications and Market Outlook - Ford has faced additional financial pressures from costly recalls and repairs in its gasoline-powered lineup, which have impacted profits [10][12]. - The company has absorbed $800 million in tariff-related costs in the second quarter alone, with expectations of a net $2 billion tariff hit for 2025 [12]. - Despite these challenges, Ford's Pro division continues to perform well, and hybrid sales are on the rise, providing some stability [14]. Group 5: Investment Considerations - Ford's stock has increased by around 10% over the past year, but it still lags behind the industry average [17]. - The company trades at a forward price-to-earnings ratio of 0.27, which is below the industry average, indicating potential value for investors [18]. - The success of Ford's new EV strategy will be crucial for its long-term profitability and market position, with a focus on proving the economics of its affordable EV program before further scaling [21][22].