- Ford aims to reach an 8% to 10% operating margin from its EV business.
- Next year, Ford will start releasing financial data for its electric vehicle division.
- One approach to cut costs is to add value incrementally to already existing platforms.
What’s going on with Ford stock
After the company released its second-quarter earnings less than a week ago, Ford stock surged nearly 5% to start the week. Monday’s bounce didn’t come from the earnings themselves, but there was a mention of something addressed last week. As of the market close, Ford Motor Company’s (NYSE:F) stock had dropped some of its gains, but it remained 4.4% above Friday’s close.
Why we care
Ford announced today that it would release a new model of its popular Maverick pickup truck. Following last week’s talk about how Ford plans to boost profitability by investing in its electric vehicle range, the news saw excited greetings. The Maverick’s new package is one way Ford intends to achieve that.
The Ford Maverick is the company’s most basic pickup truck, with a starting price of around $21,000. However, on Monday, Ford announced that it would offer an off-road package for the hybrid vehicle. According to CNBC, the Tremor option will set you back approximately $3,000 and can be purchased beginning this fall.
The Maverick is attracting a new generation of buyers, many of whom are first-time Ford purchasers. In addition, the new option illustrates how Ford plans to use its existing platforms to boost profits. Last week, CEO Jim Farley said the firm will invest $50 billion to increase electric vehicle manufacturing to a yearly production rate of 600,000 by the end of 2023 and 2 million three years later.
It aims to make the difference with improved profitability from its existing range. Starting next year, Ford will disclose financial performance for its internal combustion and electric products to achieve 8% to 10% operating profit in its EV business. One approach to do so is by decreasing significant model changes and instead focusing on value-added improvements to existing platforms. Today’s news illustrates how it’s attempting to do so.