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Ford F shares jumped higher on Friday after a report that the automaker is considering decoupling its electric car business from its legacy operations.
Bloomberg News reports that CEO Jim Farley is considering ways to separate the division, which is targeting billions of dollars in investments over the coming years, from the combustion engine business.
In fact, Ford briefly surpassed rival General Motors (GM) – Get the General Motors report By market capitalization earlier this year it booked $8.2 billion of its investment in Rivian (countryside) – Get a report from Rivian Automotive, Inc. It collected 200,000 reservations for the newly unveiled F-150 Lighting electric pickup truck.
stronghold It plans to double its current EV production by 2023And it sees profit growth this year between 15% and 20%, but weaker-than-expected fourth-quarter earnings, as well as ongoing supply chain and production disruptions, have tested investors’ patience with its ambitions to challenge Tesla. (TSLA) – Get a Tesla Inc . report Electric car dominance.
“Supply constraints will remain flexible throughout the year, reflecting a variety of factors, including semiconductors and Covid,” Chief Financial Officer John Lawler told investors on a conference call late last month, adding that the automaker expects commodity headwinds of about 1.5 billion, as well as “other inflationary pressures that will affect a wide range of costs.”
Jeffreys analyst Philip Houchois who Lowered his rating on Ford to “Hold” from “buy” last mIn one day, he warned that electric vehicle offerings to OEMs like Ford and GM, as well as their profit potential, “remain driven mostly by cyclical shortages, returns remain within historical parameters, and the EV transition is largely a zero-sum game to begin with.” .”
Ford shares were up 4% early Friday trading at $18.25 per share, a move that should leave the stock down 28% over the past month.
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