Ford Motor’s latest sales numbers from February are paving the way for a successful year ahead.
Sales Figures
In the U.S., Ford sold a total of 174,192 units in February, marking a significant 10.5% increase compared to the previous year. Notably, sales of all-electric vehicles saw a substantial surge, totaling 6,368 units, an impressive 80% rise from 2023. Hybrid vehicle sales also experienced a positive trend, reaching 12,045 units, a notable 32% increase.
Electrified Vehicle Sales
Battery electric vehicle sales contributed to about 3.7% of Ford’s total sales, up from 2.2% in the previous year. When considering all electrified vehicles—comprising all-electric vehicles and hybrids—they accounted for approximately 10.6% of total sales, showcasing a significant increase from around 8% previously.
Investor Response
Following the promising sales performance, investors have welcomed the news with Ford’s stock seeing a solid 4.5% rise to $13 per share during midday trading. In contrast, the broader market as indicated by the S&P 500 and Dow Jones Industrial Average experienced slight declines of 0.1% and 0.3%, respectively.
Market Comparison
Interestingly, while Ford’s stock was on the rise, Tesla’s stock witnessed a decline of 5.7%. This drop could be attributed to Tesla’s increased price incentives in China and the U.S., causing concerns among investors regarding electric vehicle demand.
Tesla’s recent offer of 5,000 free Supercharging miles for select trade-ins until the end of March is an example of its aggressive marketing strategy in both production and sales. It operates as both the auto manufacturer and dealer, making direct comparisons with other automakers challenging.
Industry Insights
Data from industry provider Cox Automotive reveals that U.S. auto industry incentives have surged to about 5.7% of the average transaction price in January—doubling from 2.8% in the previous year. This translates to approximately $2,700 off a new car at the dealership, up significantly from around $1,400 previously.
Ford vs. Tesla
Ford has made considerable progress in increasing its all-electric vehicle sales by 25% in the first two months of 2024 compared to the same period in 2023. This positive trend reflects growing demand for electric vehicles, yet each company’s stock reacts differently to such data points due to varying growth expectations embedded within them.
While Ford shares trade at about 6.7 times the estimated 2024 earnings, Tesla’s stock trades significantly higher at around 66 times projected earnings.
Stock Performance
Year-to-date comparisons showcase Ford’s shares up roughly 6.5%, while Tesla’s stock has experienced a decrease of approximately 23%. The contrasting performances are attributed to Tesla’s softened EV sales growth, contrasting with Ford’s solid 2024 auto sales that have bolstered its stock value.
By: Al Root