Wall Street Does Not Believe Ford

Ford Motor Co. (NYSE: F) has started to break out the numbers for its electric vehicle (EV) unit. It calls the unit Model e (while the gasoline-powered vehicle unit has been dubbed Ford Blue). Ford e will have an EBIT (earnings before interest and taxes) margin of 8% by late 2026. The figure is based on “ambitious scaling of EV production run rates,” whatever this means. Several prominent Wall Street analysts rejected the idea that the plan was viable. If Ford’s EV past is any indication, the skepticism is warranted. (Here is every major automaker’s plan to go electric.)

Two comments reflected a broad sentiment. One came from Wells Fargo analyst Colin Langan: “It’s unclear how Ford expects to get to its 8% 2026 target margin for Model e” based on sales forecasts. And Barclays’ Dan Levy said, “We believe investors are likely to remain skeptical on the path to appropriate margins, especially amid inflationary headwinds and price declines.”

Analysts did not comment on how badly Ford has bungled its early EV product launches. If Ford cannot overcome its challenges, these forecasts have little meaning.

The Ford F-150 Lightning has been priced and then repriced, confusing consumers. The Lightning Pro had a price of $46.975 until October 5. That rose to $51.975 in a single day. The Ford F-150 EXT, which is gas-powered, has a base price of $41,800. Why buy the EV version?

Ford said it mispriced the Lightning because it got the price of components wrong.

Ford cannot get the Lightning off the production line. It closed the line when Ford found problems with the truck’s battery, the heart of the vehicle. Who wants a vehicle that Ford has trouble building? In August of last year, Ford’s quality czar, Chris Spears, said its warranty problems, which are a broad measure of quality, would go away in two to three years, according to The Wall Street Journal.

If Ford had shown a mediocre record with vehicle launches and quality, its 2026 Ford e EBIT margin might be believable. As the situation stands now, it is not.

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