As technology advances and electric vehicles and autonomous driving software become more prevalent, automakers are expanding their horizons beyond just manufacturing cars. They are now venturing into the realm of selling services alongside vehicles.
Ford Motor (ticker: F) is one such automaker with ambitious goals. Ford's commercial division, known as Ford Pro, recently unveiled its latest offering: new EV charging solutions tailored for business customers. These new solutions include alternating-current (AC) chargers that boast enhanced serviceability, improved connectivity, and over-the-air software updates.
While AC chargers may not be the fastest option available, they are ideal for commercial customers who typically rely on cost-effective overnight charging for their delivery and utility vehicles. Ford Pro CEO Ted Cannis emphasized their commitment to facilitating the transition to electric vehicles for businesses, stating, "We're dedicated to providing businesses with streamlined commercial charging solutions. With our customized EV consulting and comprehensive portfolio of charging hardware and software solutions, we can design, implement, and manage long-lasting solutions for Ford and other brands."
Ford Pro continues to demonstrate its commitment to expanding its offerings beyond vehicles by introducing these innovative EV charging solutions for business customers. With a focus on convenience, efficiency, and long-term sustainability, Ford Pro aims to be at the forefront of the electric vehicle revolution.
Tesla Expanding EV Charging Opportunities
Tesla (TSLA) has recently made a significant move by allowing non-Tesla electric vehicles to charge at their supercharging locations. This decision has opened up new possibilities for EV charging and has caught the attention of major automakers like Ford. Tesla continues to lead the way in DC fast-charging infrastructure in the United States with its extensive network.
Ford, an iconic automaker, has yet to comment on whether it owns any of the 4,200 chargers. However, this collaboration marks an essential step towards a more inclusive and sustainable future for electric vehicles.
Concerns Impacting Ford Stock
Currently, Ford's financial performance reflects that of a traditional automaker. Over the past year, Ford's shares have declined by approximately 23%, while the S&P 500 has seen a 10% increase. This discrepancy can be attributed to concerns around high interest rates affecting car demand and falling prices impacting profit margins.
Valuation Comparison
When comparing valuation ratios, Ford stock trades at approximately 6.2 times the expected per-share earnings for 2024. In contrast, the broader S&P 500 trades at around 17.4 times. This discrepancy suggests that Ford's stock is undervalued compared to the overall market.
Positive Performance of the Pro Division
Ford's Pro division continues to generate profits primarily through supplying vehicles to commercial businesses. In the second quarter, Pro reported an operating profit of $2.4 billion from sales of $15.6 billion. During this period, they delivered an impressive 365,000 units.
Market Update
As of Tuesday morning, Ford stock experienced a slight decline of 0.1%. On the other hand, futures on the S&P 500 and Dow Jones Industrial Average remained relatively flat.
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