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Ford CEO Tells Wall Street To Forget Tesla And Focus On Business

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Ford CEO Tells Wall Street To Forget Tesla And Focus On Business

(CTN News) – According to Ford Motor CEO Jim Farley, Wall Street should focus on the Detroit automaker’s “Pro” fleet business rather than Tesla and its FSD driver-assistance systems as the future of the industry.

Almost seven years ago, Deere & Co. earned $7.2 billion in pretax earnings. The unit earned roughly double last year. Stock prices of the farm equipment manufacturer have increased 235%.

Stop looking at FSD and Tesla if you want to see the future of the automotive industry. Check out Ford Pro. Farley said it has half a million subscribers and a 50% gross margin.

With Ford Pro, customers can access the automaker’s traditional fleet and commercial businesses, as well as emerging telematics, logistics, and other connected services. Parts and services for businesses are also included.

Pretax earnings from Ford’s Pro unit are expected to reach $8 billion to $9 billion this year, the automaker said earlier this month. Those earnings are compared with expectations to earn $7 billion to $7.5 billion in its traditional “Blue” business, and $5 billion to $5.5 billion in its Model e EV business.

The Full Self-Driving Beta, also known as the FSD Beta, does not break out revenue and earnings for Tesla’s self-driving software. Analysts predict that by 2030, such software will generate tens of billions.

Ford Pro’s revenue from telematics and other nontraditional subscription services will increase to $2,000 per vehicle per year, or $167 per month. Pro’s revenue will increase by 20% by 2026, according to Farley.

He reiterated Ford Pro’s undervaluation within the company. Wall Street agrees with some of them.

The analyst at Morgan Stanley called Pro last week the company’s “Ferrari,” referring to the luxury sportscar manufacturer that was significantly undervalued before being spun out of Fiat Chrysler.

“I had a $4 billion valuation on Ferrari when Fiat owned it. When Ferrari was part of Fiat, investors ignored the business, but now it’s worth $80 billion,” Jonas said during quarterly earnings call. Ford has a Ferrari now, it’s called Ford Pro. In my opinion, people ignore the cash cow.”

According to Jonas, a Tesla bull who has been around for years, profits from the company are being diverted to “EV science project.”

Investors may be skeptical of Farley’s comments. In general, Ford has not yet been a significant competitor to Tesla with its vehicle and technology offerings.

As a result of slower-than-expected adoption of current models and significant losses on its electric vehicles, the company is delaying or cutting investments in EVs by billions of dollars. Within a year of sales, the company promises its next-generation EVs will be profitable.

While EV demand is slower than expected for consumers, fleet customers are adopting all-electric vehicles faster than expected, Farley said.

Pro operations are a key part of Farley’s “Ford+” growth strategy. Ted Cannis, the unit’s leader, has a long history with the company as a utility man.

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