1 Electric Vehicle Stock to Consider Buying Now That Ford Just Pulled Back From EVs
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The electric vehicle market is evolving, and one company will emerge as a standout in the new environment.Ford Motor Company (F 2.63%) recently announced a whopping $19.5 billion charge on its electric vehicle (EV) related assets, including $5.5 billion in "cash effects with the majority paid in 2026 and the remainder in 2027." In addition, the company reduced its focus on EV programs to concentrate on its investment in a Universal EV Platform, aiming to produce "smaller, affordable models." It's a symbolic shift, and that highlights some key dynamics in the industry. The EV market will look different When lockdowns were imposed on the economy, automakers rushed to advance EV investment plans, leading to a slew of EV models hitting the market over the last couple of years. ExpandNASDAQ: TSLATeslaToday's Change(-4.58%) $-22.46Current Price$467.42Key Data PointsMarket Cap$1.6TDay's Range$466.22 - $495.2352wk Range$214.25 - $495.28Volume14KAvg Vol86MGross Margin17.01% Unfortunately, nearly all of them, Ford's models among them, were unprofitable. They were de facto loss leaders for automakers trying to capture market share from industry leader Tesla (TSLA 4.58%). That strategy makes perfect sense; after all, EVs are the growth area of the auto industry, and as Ford's existing $5 billion commitment to an EV platform demonstrates, the industry still believes this. The new models released in 2024 and 2025 by the industry led to a loss of market share for Tesla and pressure on its profit margins. But here's the thing: Tesla remained profitable and cash-generative over the last couple of years, and now its rivals are forced to pull back on some models that have challenged Tesla's dominance. Image source: Tesla. Why Tesla is ideally positioned If Ford's actions are a harbinger of what's to come, it looks likely that Tesla will be the winner. Automakers cannot continue to subsidize the acquisition of market share by incurring such huge losses. In addition, the company's scale and mass EV production capability mean it's also well positioned to produce the kind of low-cost, yet profitable, models that consumers want.Advertisement The challenge and opportunity in the EV world is not only to produce models, but to produce profitable EV models. Only China's BYD can currently compete with Tesla on this measure.About the AuthorLee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. Prior to The Motley Fool, Lee was a Civil Engineer and Investment Manager. He holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment. Lee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community.TMFSaintGermainX@LeeSamahaRead NextSep 29, 2020 •By Chris HillWhy Nike Stock Is UpSep 4, 2020 •By George Budwell, PhD3 Top Stocks to Buy in SeptemberApr 30, 2020 •By Motley Fool TranscribersTesla, Inc. (TSLA) Q1 2020 Earnings Call TranscriptJan 30, 2020 •By Motley Fool TranscribersTesla, Inc. (TSLA) Q4 2019 Earnings Call TranscriptJul 24, 2019 •By Motley Fool TranscribersTesla, Inc. (TSLA) Q2 2019 Earnings Call TranscriptApr 25, 2019 •By Motley Fool TranscribersTesla, Inc. (TSLA) Q1 2019 Earnings Call Transcript