Ford (F), speeding its move into electric vehicles, has just announced the separation of its electric vehicle (BEV) manufacturing activities from that of the production of internal combustion cars (ICE) or gasoline cars into two separate units.
Jim Farley, president and chief executive officer at parent Ford Motor, in addition, will serve as president of the electric-vehicle division. Doug Field -- who in September was named to head advanced technology and embedded systems, reporting to Farley -- will lead the electric division's product creation as chief EV and digital systems officer."
The reorganization was obvious and expected. Both divisions will be headed by the Ford parent company. "Nothing interesting so far. But wait. Things are about to take an interesting turn," writes TheStreet's Luc Olinga. The electric vehicle division will be called Ford Model E.
"Does that ring a bell? Let's say it this way: doesn't it remind you of a competitor? A very noisy and powerful competitor?," Olinga adds.
Yes, it is Tesla (TSLA) we are talking about. Apart from its very first model, the Roadster, the vehicles marketed by Elon Musk's company had names taken from the alphabet until Ford showed up. Model S for the luxury sedan, and the Model X for the luxury SUV/crossover. After the Model X, Tesla wanted to introduce an entry-level vehicle to the market.
"We have the S and the X and then a friend asked me at a party 'Hey what are you going to call the third-generation car?" Musk told CNNMoney in 2014. "Well, we've got the S and the X so we might as well make it the E."
But this car would eventually be called Model 3, thus breaking with the letters. So what went wrong? When Tesla wanted to register the trademark, the firm encountered unexpected opposition: Ford. The Dearborn, Mich. automaker blocked the initiative.
"Ford gave us a call and said they're gonna sue us for using Model E. And we're like, Ford's killing SEX. I mean, that's terrible!'" Musk told CNNMoney.
To prevent Tesla from using the letter E, Jim Farley's company mentioned a 2010 agreement between the two companies according to which Tesla could not use the letter E as the name of vehicles, reported Automotive News.
Can Ford's Division Split Electrify the Stock Price?
Shares of Ford haven't escaped the vortex of volatility that’s wreaked havoc on the stock market this year. The stock is down a third from the high, which was hit on Jan. 13.
On Wednesday, though, the stock received an upside jolt. The auto giant's shares closed up 8.38% following the news it will separate its electric vehicle and gasoline car businesses.
For the bulls, it’s been a frustrating series of events. On Feb. 18, Ford stock rallied on reports it was considering a spinoff for its EV business. About a week later, the stock faded on news from the company saying that that wasn’t the case. Ford said, “We have no plans to spin off our battery electric-vehicle business or our traditional ICE business.”
Well, we're just nine days later and the automaker is going to “split its operations into two separate but complementary divisions.”
TheStreet Quant Ratings rates Ford as a Buy with a rating score of B.
Here are more of the top electric vehicle stocks to watch this week:
Rivian
In the raging EV war, all the automakers are seeking an edge against rivals. And in a race arbitrated by the financial markets and consumers, any break they catch is important, especially when it is likely to change the industry narrative. Rivian Automotive (RIVN), which is working to persuade investors and consumers that it's able to manage production-rate increases, knows this only too well.
The Irvine, Calif., automaker faces a big test on March 10, when it reports its financial results. It goes without saying that analysts will focus on its production after Rivian indicated in December that it was experiencing bottleneck problems and struggling with the shortage of chips. But some two weeks before this big test, the pressure seems to be easing a bit. A key obstacle that stood in front of its development ambitions has just been removed. Rivian only has one factory at the moment, in Normal, Ill. The authorities of the U.S. state of Georgia, where Rivian wants to establish its second production site, have just given it a gift.
TheStreet Quant Ratings does not have a rating for Rivian.
Jeep
Jeep, the iconic all-terrain SUV brand, is about to enter the 100% electric vehicle market or BEV (battery electric vehicle). Its owner, Stellantis (STLA), a group born of the merger between the Italian-American car manufacturers Fiat Chrysler and the French Peugeot, has just announced its roadmap. This roadmap, unveiled during the presentation of the fourth-quarter earnings, provides for the launch of a passenger electric vehicle under the Jeep brand by no later than 2023.
In this document, Stellantis maintains the mystery around this vehicle. Apart from the date displayed 2022 and 2023 in the launches section, there is nothing other than a 'TBA' (to be announced) in the model section. The company led by Portuguese Carlos Tavares will undoubtedly lift the veil on this car either on March 1 when presenting its long-term strategic plan to investors or between April 9 and 17 during the 2022 Easter Jeep Safari held in Moab, Utah.
TheStreet Quant Ratings does not have a rating for Stellanis.
Tesla
Elon Musk has promised a lot and hasn't always delivered, the Tesla CEO's critics like to say. If they recognize him for having helped to transform the automotive sector to electrification, they very often remind him of his many broken promises. So it's no surprise that in the face of the Russian invasion of Ukraine, his promise to help Ukrainians gain access to fast, secure internet was met with skepticism.
"@elonmusk, while you try to colonize Mars -- Russia try to occupy Ukraine! While your rockets successfully land from space -- Russian rockets attack Ukrainian civil people! We ask you to provide Ukraine with Starlink stations and to address sane Russians to stand," Mykhailo Fedorov, the Ukrainian vice prime minister and minister of digital transformation, wrote on his Twitter account on Saturday.
Traditionally, the opposing political party picks one representative to rebut the U.S. president's annual State of the Union address. This week, Republicans chose Iowa Gov. Kim Reynolds to be the voice of opposition to President Joe Biden's vision for the country. Biden, however, may have faced a more formidable opponent in real-time on Twitter. Biden gave a shoutout to the U.S. auto industry during his speech Tuesday night, name-dropping Ford and General Motors for building new factories in the U.S. as they transform their combustion-engine offerings into electric ones.
The president's social-media team was also hard at work during the speech, tweeting out facts about the two legacy automakers that bolstered Biden's praise of their efforts. Musk decided to use social media to fact-check Biden in real-time and eventually emailed CNBC, saying, "Nobody is watching the State of the Union."
TheStreet Quant Ratings rates Tesla as a Hold with a rating score of C+.
General Motors, Lordstown Motors
Things don't seem to be looking up for cash-strapped electric vehicle startup Lordstown Motors (RIDE). They even seem to be getting worse: General Motors (GM), whose presence as a shareholder could ease investors' concerns, has just withdrawn. The owner of the Chevrolet and Cadillac brands has sold its remaining stake in Lordstown Motors, a spokesman, Jim Cain, confirmed to TheStreet. "We did sell our 7.5-million-share stake during the fourth quarter," Cain said in an email statement, confirming a report from the Detroit Free Press.
This participation amounted to less than 5% of Lordstown. The initial equity value was $75 million. "You’ll recall, we made a small investment to facilitate the sale of our former assembly plant and help the plant resume production," Cain added. The supply agreements between Lordstown and GM remain intact. GM in 2020 agreed to provide Lordstown with airbags, steering columns and steering wheels, according to a company filing.
TheStreet Quant Ratings rates General Motors as a Buy with a rating score of B.
Lucid
Tesla has managed to establish itself as the center of conversations in and around the automobile industry. Each vehicle manufacturer compares itself to the company co-founded and led by Elon Musk, but Lucid Group (LCID) wants to change this established order. The manufacturer of luxury electric sedans has just announced an agreement on its international expansion just five months after starting car production.
Lucid has signed an agreement with Saudi Arabia to build its first international factory there. This will be its second plant overall. The group currently only has one production site based in Casa Grande, Ariz. The agreement was signed with the Ministry of Investment of Saudi Arabia ("MISA"), the Saudi Industrial Development Fund ("SIDF"), and the Economic City at King Abdullah Economic City ("KAEC").
But, the luxury electric vehicle maker has still not found a way to solve its production problems. And it's not sure things will get any better anytime soon. The electric car manufacturer has significantly lowered its main production target. The company now expects to produce only between 12,000 and 14,000 cars for 2022, according to a news release, a drop of 30% to 40% less than its initial forecast of 20,000 units. The new numbers reflect supply chain issues and bottlenecks, Lucid Group said.
