Drivers everywhere are going crazy over the new selection of Ford EVs (electric vehicles) popping up at Ford dealers across the country.
If it seemed like your local Ford dealer was a little slow to advertise electric and hybrid options, you’re right. Ford wasn’t as quick as some other auto manufacturers to jump into the electric game, but it jumped into the market hard and fast. Ford’s entry into the EV market has made a pretty sizable impact on stock prices.
A Bet Worth Taking
It’s not every day that an executive buys stock above and beyond the options offered in their compensation. In May of 2020, Jim Farley did exactly that by using his own money to purchase $1 million worth of shares (195,000 shares). This purchase was in addition to the options offered in his compensation package as chief operating officer.
This bet certainly paid off. Farley stepped up to the CEO role five months later. Today, that stock is worth four times as much as he paid for it. Farley is holding on to those shares, and it seems that others are following suit. Bill Ford, founder Henry Ford’s great-grandson, recently upped his share ownership as well.
While there are a number of reasons Ford’s stock price is rising, it’s clear to see that Ford’s move into the EV market plays a significant role.
Success On All Fronts
Ford was far from the first mover in the EV market, but it entered it just right to make an impact. Look at the Mustang Mach-E SUV. This EV isn’t just a marvel of engineering, but it also has some impressive sales numbers. The reviews are amazing. The demand for this vehicle is so high that Ford recently announced that it would be tripling its production out of its factory in Mexico.
Another highly-anticipated EV is the Ford F-150 Lightning. This truck isn’t even available yet, and it’s practically sold out. Shoppers were able to make a reservation with just $100 down. After the truck hit 200,000 reservations, Ford had to stop taking them. Production is planned to double, which should put it at 80,000 trucks annually.
A similar situation is occurring for Ford’s new mid-size hybrid-available pickup truck, the Ford Maverick. The demand is so strong that Ford has to stop taking reservations just to meet the current orders. The fact is, Ford knows how to build electric vehicles that drivers truly want to bring home.
Many long-standing automakers felt like they could never fully compete in the electric market. The expectation is that drivers would stick to companies that only make EVs. There were plenty of people who didn’t believe that Ford could make a successful EV. That sentiment is being proven wrong. The only thing Farley thinks Ford did wrong was not entering the EV market sooner. With the emphasis and money being put into that market, it’s obvious that he’s trying to make up for a lost time, and shoppers are welcoming every bit of it.
As for stock prices, everyone is trying to get in on Ford’s success. Ford also made some operations cuts in challenging markets that freed up some money to go wards EV R&D. In a world where going electric is almost an inevitability, Ford is adapting in a true Darwinian fashion. It’s not just adapting, though; Ford is thriving, and stockholders are reaping the benefits.
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