Ford Continues to Seek Cost Reductions While Investing in Electric Vehicles

Ford is turning itself around by focusing on light-truck models in the United States, which we think is the right move, since light trucks are about 80% of U.S. industry new light-vehicle sales. Ford's challenge is to increase share profitably while elevating Lincoln into a global luxury brand. The mostly no-moat nature of the auto industry makes these tasks difficult, and we see headwinds from areas such as restructuring, commodities, and exchange while investments in mobility and electrification take years to bear fruit. Ford targets 50% global all electric volume by 2030 and an annual production rate of over 2 million battery electric vehicles by 2026, though CEO Jim Farley in July 2023 indicated flexibility on the latter's timing.