Ford climbs 9% after saying it will boost electric-vehicle spending to $30 billion by 2025

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  • Ford climbed as much as 9% Wednesday after revealing plans to boost its electric-vehicle investment to $30 billion by 2025.
  • The automaker also said it expects electric vehicles to make up 40% of its global sales by 2030.
  • The announcements were made during Ford’s Investor Day, its first under CEO Jim Farley.
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Shares of Ford Motor climbed as much as 9% on Wednesday after the automaker revealed plans to boost its electric-vehicle investment to more than $30 billion by 2025, up from its previous $22 billion target.

The company also said it expects electric vehicles to make up 40% of its global sales by 2030.

The series of announcements were made during Ford’s Investor Day conference on Wednesday, the first under CEO Jim Farley who assumed his post in October 2020. Farley came to Ford in 2007 after a career at Toyota.

“While the stocks and the EV space are clearly going through a painful digestion period, we view this as a short-term pullback in a bullish multi-year upward rally,” Wedbush analyst Dan Ives said in a note Wednesday.

He added: “We forecast the EV market represents a $5 trillion [total addressable market] over the next decade with many EV original equipment manufacturers/supply chain players poised to be major winners over the coming years in this green tidal wave.”

The rationale behind the new plan dubbed “Ford+” is for investors to shift their perspective of the company from an automaker to a technology firm instead.

The company under the plan aims to deliver an 8% operating-income margin by 2023.

Ford joins other automakers worldwide in transitioning gasoline-powered vehicles into electric-powered ones in a bid to promote a greener environment and to compete with the leading electric-vehicle makers such as Tesla and Volkswagen.

General Motors in January 2021 said it will end all sales of gas-powered vehicles by 2035.

Thus far, Ford has amassed 70,000 reservations for its F-150 Lightning, an all-electric version of its iconic pickup truck that was unveiled one week ago.

“As more companies make the commitment to go carbon neutral, they are going to expect electric products that can integrate into their operations easily,” Jim Farley, Ford president and CEO, said in a statement in May. “Ford is so uniquely positioned to answer this call because we have a zero-emissions pickup and van, many of our customers want both vehicles in their fleet.”

US President Joe Biden last week tested Ford’s electric F-150 prototype himself during a visit to the Ford plant to tout federal investment in EVs.

The president has committed $174 billion to boost EV production under his massive $2 trillion infrastructure plan.

Read the original article on Business Insider