Carmakers adjust electrification plans as EV demand slows By Reuters
Automakers Scaling Back EV Targets: Major global automakers are reducing their electrification goals due to declining demand for fully electric vehicles, challenges in affordability, slow charging infrastructure development, and increased competition from cheaper alternatives, particularly from China.
Shift Towards Hybrid Models: As sales of hybrid electric cars rise, companies like Stellantis, Toyota, and Volvo have adjusted their production plans and targets, indicating a more cautious approach to fully transitioning to electric vehicles by 2030.
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- Stellantis Stock Decline: Stellantis stock experienced a significant drop of 24% last Friday following a management update.
- Market Sentiment: The decline highlights how good opportunities in the stock market can often be perceived as risky or frightening.
- Stock Price Increase: Ford Motor Company closed at $13.85 on Wednesday, reflecting a 2.1% increase, primarily driven by investor focus on record 2025 revenue and 2026 EBIT guidance, indicating market confidence in the company's future performance.
- Surge in Trading Volume: Trading volume reached 125.4 million shares, approximately 113% above the three-month average of 58.8 million shares, reflecting heightened investor interest in Ford's execution of its reshaped EV and hybrid strategy.
- Optimistic Earnings Forecast: Despite facing an approximately $8.2 billion annual loss due to impairments on EV assets, tariff costs, and supply issues, management forecasts adjusted 2026 EBIT between $8 billion and $10 billion, meeting or exceeding most market expectations.
- Strategic Shift: Ford's pivot from purely electric offerings to hybrid vehicles, which have gained popularity among consumers, has pleased investors, and management's focus on profitable growth has contributed to today's trading volume and stock price increase.
- Disappointing Financials: Ford reported a net loss of $11.1 billion for Q4 and $8.2 billion for the year, primarily due to its EV business, while adjusted EBIT of $6.8 billion was close to the forecast of $7 billion but fell short of the $8.86 billion expected, highlighting challenges during the company's transition.
- Optimistic Future Outlook: The company projects adjusted EBIT of $8 billion to $10 billion for 2026, with adjusted free cash flow of $5 billion to $6 billion and capital expenditures of $9.5 billion to $10.5 billion, indicating confidence in future profitability despite another anticipated loss of $4 billion to $4.5 billion from its Model e unit.
- Sales Growth Trend: Despite a 50% drop in EV sales following the expiration of federal tax credits, Ford's U.S. sales rose 2.7% in Q4 and 6% for the year, totaling approximately 2.2 million vehicles, demonstrating strong demand for its traditional gas-powered and hybrid vehicles.
- Strategic Adjustments and Goals: Ford aims for an 8% adjusted EBIT margin by 2029, up from 3.6% in 2025, by restructuring its business into three units: Ford Blue, Ford Model e, and Ford Pro, to enhance operational efficiency and market competitiveness.
- Strong Order Backlog: SoundHound AI boasts an order backlog exceeding $1 billion, indicating customer recognition of long-term value despite the company not yet being profitable, which is expected to drive future revenue growth.
- Significant Sales Growth: The company experienced a 120% increase in sales over the past year, reflecting substantial progress in revenue collection from long-term contracts, even as it faces a net loss of $313.4 million.
- Overreaction in Market: The stock's valuation reset due to macroeconomic pressures and AI bubble concerns seems excessive, as the company's fundamentals remain intact, presenting a buying opportunity for patient investors.
- Optimistic Future Outlook: Analysts predict positive EPS by fiscal year 2027, and while profitability is still a few years away, the company is scaling rapidly with high customer loyalty, indicating significant potential in the voice AI market.
- Surge in Trading Volume: Ford Motor Company's trading volume reached 69.6 million shares on Tuesday, nearly 21% above the three-month average of 57.6 million shares, indicating heightened investor interest ahead of the upcoming earnings report, which could impact stock volatility.
- Focus on Profitability Expectations: Investors are concentrating on margins rather than overall sales as Ford approaches its Q4 2024 earnings report, with analysts questioning whether improvements in warranty costs and pricing discipline can offset pressures from recalls and supply disruptions.
- Active Options Market: Increased activity and a higher put-to-call ratio in the options market suggest traders are preparing for a sharp reaction to the earnings report, indicating that significant volatility may follow the announcement.
- Historical Performance Review: Since going public in 1972, Ford's stock has grown by 526%, although its current price of $13.59 reflects the complexities of the company's growth potential in the context of the current market environment.










