Ahead of its Investor Day event on Tuesday, Ford (NYSE: F) stated that it is doubling down on its EV development efforts by announcing it is investing $30 billion by 2025 — up from $22 billion it pledged in February. The motor company also promised that a whopping 40% of its cars sold will be electric by 2030. Impressively, Ford stated that it has amassed 70,000 reservations for its new F-150 Lightning electric pickup in one week.
Ford’s EV efforts
The news is welcomed by Ford shareholders as they know the potential of investing and focusing on electric vehicle technologies. Once a company has the technology in place, EVs can be cheaper than building gas-powered cars. This is due to these vehicles having fewer moving parts and therefore require less labor to build.
The company is also building two new battery factories that are part of a joint venture with Korean battery maker SK Innovation. Meanwhile, Ford’s electric SUV, the Mustang Mach-E, is already on the market.
Who are Ford’s competitors?
While all these developments are positive for Ford investors, the U.S. motor firm is still miles behind market leader Tesla (NASDAQ: TSLA). Other motor industry giants are also revving up their efforts in the EV game, notably Volkswagen and domestic competitor General Motors, all of which have more EV offerings and bigger electrification targets.
GM has also made a big statement recently, saying that it is aiming to sell only emission-free vehicles within 4 years.
Almost every automaker worth discussing is ramping up its EV production because they know it’s the future. As governments enact stricter environmental legislations, drivers are starting to hop on board by going green too. Therefore, Wall Street is more interested in investing in car companies that have ambitious EV plans instead of traditional automakers.
Just look at Tesla, for example. It’s the world’s most valuable car company despite it having only a fraction of the revenue and sales of its traditional rivals. Shockingly, Tesla’s market cap is roughly the same as the five biggest global car companies combined.
Following Ford’s latest EV announcement, the stock jumped 2% in premarket trading today and is up almost 58% year-to-date.
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Financial Writer at MyWallSt
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