Talk about electric vehicles (EVs), and not many investors look to legacy automakers Ford Motor (F 2.08%) at the club first. However, you’d be surprised how much Ford invested in EVs and how quickly they sold them.
In fact, Ford’s recent announcements reveal just how much EVs are to its growth in the coming years – all while the company is battling the industry’s downturn even when it comes to traditional vehicles. It’s a win-win situation for the company and a winner in the making for any investor who buys Ford stock now while it’s still trading cheap.
Ford leads the auto industry
Ford releases its sales data every month and just came out with May figures. The results are so powerful that you can’t ignore them. That’s not all: The company also just revealed plans to launch a new commercial EV. This comes just days after it began selling its F-150 Lightning pickup, an all-electric version of its F-150 pickup that has been America’s best-selling truck for more than four decades.
To start, Ford’s total US vehicle sales fell about 4.5% year-on-year in May. For perspective, this is one of no later than sales decline in recent months. Also, it was much lower than the expected 30% drop in total new vehicle sales in the US in May, according to auto industry forecasts website MarkLines.
|Month||Percentage decline in US Ford sales (year over year)|
That means two things. First, Ford appears to be tackling lingering cost and supply chain challenges well, particularly the ongoing shortage of semiconductor chips that has plagued the auto industry for nearly two years now. Second, Ford is gaining market share in the US auto market — Ford controlled 13.5% of the market last month, up from 10% in May 2021.
So what is driving Ford’s sales higher?
While total truck and SUV sales fell by 1.4% and 4.4% year-on-year, respectively, a few things stood out. Sales of Ford’s F-Series pickups were up 6.9% year-on-year, and among automakers, demand for the Edge and Explorer SUVs remained strong.
However, if it weren’t for the EV, Ford’s numbers could be disastrous. And this could be a start for this automaker.
How EV puts Ford on a growth path
Ford’s EV sales — hold your breath — rose 221.5% higher in May. The company says it’s almost four times faster than overall EV sales growth in the US
The E-Transit segment had its best selling month, and so did the Mustang Mach-E — SUV sales were up 166% year over year. May was also the first month Ford began selling the F-150 Lightning pickup, with the company saying more than 75% of its customers who have ordered electric trucks so far are newcomers to Ford. That should just give investors an idea of how popular the F-150 Lightning is, and the size of the market it could capture in the years to come. The company even stopped taking retail orders for the F-150 Lightning in December after orders exceeded expectations and surpassed 200,000 units.
In fact, Ford said Thursday it will invest $3.7 billion and add more than 6,200 new union jobs at its three plants as production of gas and electric-powered vehicles increases. Plans include:
- A new commercial EV to be produced in Ohio to debut mid-decade.
- The new Mustang coupe and Ranger pickup will be built in Michigan.
- Upgraded F-150 Lightning production in Michigan.
- Increased production of Transit and E-Transit vans in Missouri.
Remember, this is just part of Ford’s goal of producing 2 million EVs globally by 2026, where they expect EVs to account for a third of its global vehicle sales volume.
One of the most underrated EV stocks you can buy right now
Ford’s 2026 goal seems achievable given the kind of demand the company is already witnessing for its EVs. Triple-digit percentage growth in EV sales amid chronic supply and logistics challenges is no mean feat, and Ford has just demonstrated how effectively it can use its more than 100 years of experience in the auto industry as the industry is transforming and EVs are changing the way we drive.
I’d even mention Ford as an EV growth stock now. While most EV stocks still have very high premiums, Ford’s stock trades at a price-to-sales ratio of just 0.4. I’d be surprised if the market didn’t start bidding its stock higher in the coming months, and right now I’m going to hit the table at Ford and call it one of the best stocks you can buy for under $20 a share.