Ford Motor Co. (F) – Get Ford Motor Company Report established a key target in its multi-billion effort to challenge Tesla’s (TSLA) – Get Tesla Inc Report electric vehicle dominance Monday as it prepares to roll out deliveries of its F-150 Lightning later in the spring.
Ford, which boosted its planned EV investment total by two thirds, to $50 billion earlier this month while unveiling plans to run its legacy combustion engine business separately from its electrified division, plans to capture around a third of the world’s annual EV production by 2026.
It has also agreed a deal with South Korea’s SK On and Turkey’s Koc Holding to develop an electric vehicle batter plant in southeastern Europe, with plans to double the number of cars made on the German group’s modular electric-drive platform (MEB) to around 1.2 million units over the next six years.
Weaker-than-expected fourth quarter profits, however, as well as ongoing supply-chain and production disruptions, have tested investor patience for its ambitions to challenge Tesla’s dominance.
Morgan Stanley analyst Adam Jonas is one of them: he lowered his 2022 earnings estimate for Ford to $1.95 from $2.15 in note published Monday, adding that he thinks Ford will fall far short of its goal to produce 2 million batter-electric vehicles by 2026.
Data from tests on Ford’s new F-150 Lighting, however, could go a long way towards easing at least some investor concerns regarding consumer demand.
Ford said the all-electric F-150 Lightning XLT and Lariat trims with the extended range battery were confirmed with a EPA-estimated range of 320 miles, with the F-150 Lightning Platinum coming in at 300 miles. Standard battery ranges were confirmed at 230 miles per charge.
“We are laser focused on continually improving our energy consumption efficiency for Lightning and the team is really happy to deliver these results for our customers,” said chief program engineer Linda Zhang of the F-150, which has pre-orders of around 250,000.
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The results compare favorably to Tesla’s Model Y LR all-wheel drive, which had an EPA-estimated range of 330 miles, and 358 miles for the long-range version.
The long-range version of the Tesla Model X, meanwhile, is around 351 miles.
Ford shares were marked 1.4% lower in early Monday trading, compared to a modest 0.1% gain for the S&P 500, to change hands at $16.62 each. The stock has fallen around 23.6% so far this year.
Still, Ford’s efforts to ramp-up production of its F-150, a crucial component of its broader Tesla challenge, has run into a series of supply-chain related disruptions and cost increases over the past two months, leading to a one-week halt at one of its main assembly plants in Kansas City.
Raw materials prices, as well as labor costs linked to overall production cycles, have risen steadily over the past year, while Nickel prices — a crucial component in EV battery making — briefly topped a record high $100,000 per ton on the London Metals Exchange before officials cancelled trading earlier this month.
Tesla, for its part, raised prices on its best-selling models in the U.S. and China for the second time in a week this month, amid what CEO Elon Musk called “”significant recent inflation pressure in raw materials & logistics” as a result of the recent ramp in global commodity prices, which he linked to the ongoing war between Russia and Ukraine.
Ford sold around 1.9 million cars last year, down around 7% from 2020 levels, with overall revenues of around $136 billion.
Ford’s EV total, however, was only around 117,500, well behind the record-setting delivery total of 936,000 for Tesla.
Tesla shares, fresh off their best weekly gain of the year, were marked 2.1% higher Monday and changing hands at $923.00, a move that trims the stock’s year-to-date gain to around 23%.
