Ford Stock Falls as the Automaker Tries To Cut Expenses and Increase Its Subscription Income

Ford Stock

Ford (NYSE:F)

Later on Monday, after restating guiding objectives and describing several supply chain agreements, Ford detailed its efforts to reduce expenses in the face of an EV push, boost production of ICE cars, and avoid geopolitical risk.

The manufacturer headquartered in Dearborn released a slew of statements early on Monday. Nemaska Lithium, backed by Livent, disclosed an agreement to supply lithium hydroxide. Compass Minerals disclosed an agreement to supply battery-grade lithium carbonate from its lithium brine development project in Utah.

The day’s major developments in electric vehicle manufacturing included CEO Jim Farley’s reveal of a forthcoming three-row, seven-seat SUV with a range of 350 miles. Farley compared the new car to a “personal bullet train.” He pointed out that it was larger than most other electric vehicles. Expect the next generation to hit shelves in 2025.

Lisa Drake, Ford (NYSE:F) vice president of EV industrialization, continued the EV updates by discussing the company’s plans to lower labor and overhead costs by 30% at its Tennessee facility due to the simplified nature of EV production and layoffs. However, Farley stressed that it was more likely that positions would be restructured and redistributed rather being abolished entirely.

Drake also highlighted recent supplier agreements as a means through which future expenses might be cut. She also said that despite the new deal between the company and CATL, the automobile would be independent of China for its EV batteries.

The Capital Markets presentation began with an emphasis on electric vehicles (EVs). Still, it shifted its attention to the Ford Blue initiative, aimed at internal combustion engines (ICEs). Chief Executive Officer of Ford Blue Kumar Galhotra said to the crowd that “demand continues to outstrip capacity” for gas-powered cars. To meet the unmet demand, Galhotra said the business plans to expand production “by over 160,000 units” during the next 10 months.

Finally, Doug Field, head of the adv prod tech, gave a comprehensive presentation. Field referred to efforts to increase efficiency as “God’s work” and emphasized the fierce competition amongst manufacturers worldwide to develop smaller, more efficient batteries. He also advocated for streamlined transactions by explaining the automaker’s drive toward more online car sales.

Last but not least, Field said that the firm aims to grow income via subscriptions, much as Tesla has done with its FSD products. Field estimates that Ford’s Blue Cruise technology will bring in $200 million in sales over time.

Despite the optimistic tone during the investor presentation, the market awaits proof of Ford’s ability to deliver on its lofty goals. Just before the market closed, Ford stock was down by 0.4% on Monday.

Featured Image: Unsplash @ Kenny Eliason

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