Why Ford Shares Jumped Monday
What happened
Shares of Ford (NYSE: F) jumped more than 2% Monday morning as the company works to position itself as a leader in the electric-vehicle (EV) space. The stock was still trading up 1.1% as of 11:45 a.m. ET.
So what
Ford is slowly but surely working to challenge Tesla (NASDAQ: TSLA) head-on for leadership in the EV sector. Two recent areas where the company is working to improve are with Ford's driver-assistance system, as well as dealer costs. Ford said late last week that it will be offering its BlueCruise hands-free highway driving system with its 2023 Lincoln brand entry-level Corsair crossover.
Image source: Ford.
Separately, next week, Ford CEO Jim Farley will challenge the brand's dealer network to adopt a new strategy aiming to cut $2,000 from delivery and dealer costs, according to Reuters. The goal is to better compete with Tesla's low-cost system that directly sells to consumers.
Now what
Farley will attend a meeting with dealers in Las Vegas next week with one main topic being how to find agreements on the manner in which dealers will sell Ford's growing EV lineup. Sales and delivery costs make Ford and other traditional automakers less competitive with Tesla vehicles, which don't have those added costs associated with the dealership model.
Ford is focused on expanding EV penetration to the mass market, where cost is a major consideration. That thinking is partly why the company said it will offer its hands-free driver-assistance technology on upcoming Lincoln models, including the Corsair -- which starts at about $40,000.
Whether the Ford technology and EV lineup will resonate with middle-income consumers remains to be seen. But the company wants to offer as much technology as it can with affordably priced vehicles. Investors are glad to see the concrete steps the company is taking in that direction.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
