Shares of Ford soared to a new five-year high, after the automaker announced that it would increase spending on its electric vehicle fleet by 36% over the next four years.
According to a statement on Wednesday, the American automaker plans to up its spending towards EV technology to US$30 billion, which will help reach its goal of making four out of the 10 models it sells battery-powered. The investment will also allocate funding towards the production of batteries that the company calls IonBoost, as well as the development of solid-state batteries that are expected to significantly lower prices and increase driving range on a single charge.
Ford also plans to create a commercial-vehicles service and distribution business that the company dubs Ford Pro. This will allow the automaker to generate recurring revenue, and help it transition away from a single-transaction business model. it is expected that this move will boost the company’s operating margin to 8% by 2023. Ford’s latest commercial business will include a combination of both physical and digital services, in addition to creating a charging network consisting of home plug-in, public, and depot charging stations.
The latest move is part of mounting pressure from other automaker rivals to plan out a robust vision for an all-electric future. On May 20, Ford announced it will enter into a joint partnership with South Korea’s SK Innovation Co to produce EV batteries at two US plants, and just last week, the automaker debuted its flashy new electric F-150 Lightening pickup truck that even garnered a visit from US President Joe Biden.
Information for this briefing was found via Ford. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.