Ford’s February Sales Show Positive Growth for Electric and Hybrid Vehicles
Ford reported its February sales numbers for the U.S. on Monday, and the results were promising for the company’s electric and hybrid vehicles. The automaker sold a total of 174,192 units, representing a 10.5% increase compared to the previous year. Notably, sales of all-electric vehicles saw a significant surge, with a total of 6,368 units sold, reflecting an impressive 80% growth compared to the same period in 2023. Hybrid vehicle sales also experienced a notable uptick, reaching 12,045 units, which is approximately a 32% increase.
What’s particularly encouraging is that battery electric vehicle sales accounted for about 3.7% of Ford’s total sales, marking a growth from 2.2% in the previous year. Furthermore, total electrified vehicle sales, which include both all-electric vehicles and hybrids, accounted for approximately 10.6% of the company’s total sales, up from around 8% in the previous year.
The news has been well received by investors, as Ford’s stock rose by 4.5% to $13 per share during midday trading. Meanwhile, the S&P 500 and Dow Jones Industrial Average experienced slight declines of 0.1% and 0.3%, respectively.
This positive outlook for Ford comes as Tesla’s stock price dropped by 5.7%. Tesla, which is currently offering more price incentives in China and the U.S., has prompted concerns among investors regarding the demand for electric vehicles.
Industry data provider Cox Automotive reveals that U.S. auto industry incentives accounted for about 5.7% of the average transaction price in January, a significant increase from 2.8% in the previous year. This equates to an approximate discount of $2,700 on a new car at the dealer, up from about $1,400 in the previous year.
Despite Tesla’s struggles, Ford experienced a positive growth in all-electric vehicle sales, with a 25% increase in the first two months of 2024 compared to the same period in 2023. While this data point indicates promising demand for electric vehicles, it’s important to note that Ford and Tesla have different growth expectations ingrained in their respective stock prices.
Currently, Ford shares trade at about 6.7 times the estimated 2024 earnings, while Tesla stock trades at around 66 times the estimated earnings.
As of midday trading on Monday, Ford shares have seen a year-to-date increase of approximately 6.5%, whereas Tesla stock has declined by about 23%. The weakening growth in electric vehicle sales has put pressure on Tesla’s stock, while Ford’s solid performance in overall auto sales has driven an uptick in its share price.
Analyst comment
Positive news. Analyst: Ford’s positive growth in electric and hybrid vehicle sales suggests increasing demand. This, along with solid overall auto sales, is expected to drive an uptick in Ford’s market share and stock price. Tesla’s struggles and concerns over electric vehicle demand contribute to Ford’s favorable position in the market.
