Ford F is planning to ramp up production of the all-electric Mustang Mach-E in 2022 to cater to the unprecedented demand for the vehicle.
Ford CEO Jim Farley recently took to Twitter to announce that the U.S. auto giant aims to achieve an annual output of more than 200,000 units by 2023 in North America and Europe for Mustang Mach-E, its first mainstream electric vehicle (EV). This would imply tripling the current production rate for the vehicle. This is the first time the automaker has provided a specific production forecast for the Mustang Mach-E.
The auto biggie further confirmed that it will be able to rev up the Mustang Mach-E production capacity by utilizing the entire Cuautitlan plant in Mexico. For China, the Mustang Mach-E is manufactured domestically via General Motors’ joint venture partner Changan and the production target of these vehicles has not been altered by Farley’s tweet.
Reportedly, in order to create the enhanced production capacities in the Cuautitlan facility to meet the production target of Mustang Mach-E, Ford plans to modify the production planning for the Mexican plant. The U.S. automaker plans to withdraw the planned production of two electric SUV series – the all-electric Ford Explorer and Lincoln Aviator – from Mexico. In fact, Ford has delayed the start of production of the Explorer and Lincoln Aviator crossovers by about 18 months. They are to be built at another location yet to be determined.
The company is also working with key suppliers to boost the capacity of Mustang Mach-E, including battery cells, battery trays and electric drive systems.
Ford originally targeted 50,000 units per year for the Mustang Mach-E, which went on sale last year. The company sold 15,602 Mach-Es in Europe through the end of the third quarter and 24,791 through the end of November in the United States. In fact, owing to the robust sales of the Mustang Mach-E, Ford delivered record electrified vehicle sales in the United States in November, growing more than three times than the overall segment.
In addition to boosting production, Ford has confirmed a price bump in the United States for the Mustang Mach-E by $1,000 to $3,000, depending on the variant, as part of the shift to the 2022 model year.
Ford’s Electrification Plans
With the heightening climate change concerns, investors are intrigued by automakers that provide green transportation solutions. Amid the changing scenario, Ford is also committed to providing completely carbon-free transportation in the upcoming years and is boosting its electrification efforts to attain this target. The automaker has always been at the forefront of the automotive revolution. It is focused on its vision of an all-electric future, including providing fifth-generation lithium-ion batteries as well as preparing for the transition to solid-state batteries, which warrant longer ranges, reduced costs and safer EVs for customers.
It has committed to invest more than $30 billion by 2025 for the electrification of its commercial and retail fleet by capitalizing on its strength, starting with the EV versions of the company’s most popular nameplates.
In September, the Dearborn-based automaker partnered with its battery supplier, SK Innovation, to invest $11.4 billion in two new environmental-friendly and technologically-advanced campuses in Tennessee and Kentucky to produce EVs and batteries. Ford contributed $7 billion of the total planned investment, being the biggest ever investment in the company’s 118-year history.
In November, Ford said that it would increase its annual production capacity of EVs to 600,000 units globally by 2023 — a goal that would be spread across the Mustang Mach-E, F-150 Lightning, and commercial E-transit vans. Moreover, this outlook aligns with the automaker’s goal to become the second-biggest EV producer by volume after Tesla in North America within the next couple of years.
Ford currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Auto Companies to Tap On
Better-ranked stocks in the auto space include Goodyear Tire GT, LCI Industries LCII and Harley-Davidson HOG, all of which flaunt a Zacks Rank of 1.
Goodyear has an expected earnings growth rate of 196.86% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 80 cents over the last 60 days.
Goodyear beat the Zacks Consensus Estimate for earnings in the last four quarters. GT has a trailing four-quarter earnings surprise of 228.45%, on average. Its shares have rallied 88.4% over the past year.
LCI Industries has an expected earnings growth rate of 67.95% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 45 cents over the last 60 days.
LCI Industries beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. LCII has a trailing four-quarter earnings surprise of 10.09%, on average. Its shares have rallied 19.1% over the past year.
Harley-Davidson has an expected earnings growth rate of 34.92% for the current quarter. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 32 cents over the last 60 days.
Harley-Davidson beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. HOG has a trailing four-quarter negative earnings surprise of 138.45%, on average. Its shares have risen 4.3% over the past year.
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