From Bronco EV to revenue targets: Ford’s hits and misses throughout its investor day

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Ford Motor Co. CEO Jim Farley walks to speak at a news conference at the Rouge Complex in Dearborn, Michigan, September 17, 2020.

Rebecca Cook | Reuters

Ford Motor’s stock jumped 8.5% Wednesday during CEO Jim Farley’s first investor day as shareholders welcomed the automaker’s new “Ford+” plan aimed at increasing profits and aggressively expanding into new high-tech segments.

Executives also laid out clear sales forecasts for electric vehicles as well as profit and other financial targets that Wall Street can use to gauge the company’s progress.

“Bottom-line, we feel much better about the more cohesive strategy as Ford is focusing on their strengths,” RBC Capital Markets analyst Joseph Spak wrote in a note Thursday upgrading the automaker to outperform. “Ford still needs to execute, but the upside opportunity is clearer to us.”

Barclays analyst Brian Johnson said the new “Ford+ plan answers most investor concerns,” specifically around EVs and margin improvements.

But Ford didn’t address every topic analysts were hoping would be covered. Specifically, additional details on its future EV lineup, autonomous vehicle business and when the company plans to reinstate its coveted dividend.

Here’s more on the hits, misses and everything in between that investors should know after Ford’s investor day:

Hit: Profit margin

The company said it’s forecasting an 8% adjusted profit margin before interest and taxes in 2023 — earlier than many analysts expected.

Farley’s predecessors, Jim Hackett and Mark Fields, promised the same, but they never delivered.

Hit: Commercial

Ford said it expects to increase revenue from its commercial business to $45 billion by 2025, up from $27 billion in 2019. That includes “hardware and adjacent and new services that’s addressable by Ford.”

The automaker will create “Ford Pro,” a new vehicle services and distribution business within the automaker “devoted to commercial and government customers.”

“Ford is already very strong here, but is now offering a more compelling product via electrification and connectivity that can increase their share in this profitable segment,” Spak said.

Hit: Connected

Ford plans to exceed Tesla in sales of vehicles capable of significant remote updates by July 2022 and expand to 33 million over-the-air-enabled Ford and Lincoln vehicles by 2028.

Such a connected fleet could be competitive with its largest American rival, General Motors, which has said it expects more than 7 million of its vehicles globally to be capable of OTA updates by 2023.

Hit: EV batteries

Ford said it is working on an array of new battery technologies and expects the cost of its cells that power EVs to be under $100 per kilowatt hour by mid-decade, followed by $80 per kWh by the end of this decade.

That would significantly lower the cost of EVs, which is viewed as a large hurdle for mass adoption. According to Cairn Energy Research Advisors, the industry average is about $186 per kWh. Tesla leads at an average of $142 kWh, according to Cairn.

So-so: EVs

Some were hoping Ford would join GM in announcing plans to go all-electric by a specific timeframe. GM CEO Mary Barra has said the company will produce an all-electric fleet by 2035.

Ford didn’t go that far, but said it expects 40% of its global sales will be EVs by 2030 under an increased $30 billion investment in the new technologies from 2016-2025.

There also remain questions surrounding its plans to continue producing plug-in hybrid electric vehicles, which Farley himself has called transitional technologies.

So-so: Lightning/Bronco

Ford said a new EV platform would be the base for EV versions of the Explorer SUV, Lincoln Aviator crossover and future “rugged SUVs.”

Some expect the latter will be an EV version of its upcoming Bronco SUV. Ford showed a silhouette resembling the vehicle on its new EV platform, but Hau Thai-Tang, Ford’s chief product platform and operations officer, later said to not “read too much into it.”

Ford also said it now has 70,000 reservations for its electric F-150 Lightning following the pickup’s debut last week. That’s up from 44,500 as of Friday morning, but far below reservations for Tesla’s upcoming Cybertruck, according to CEO Elon Musk.

Miss: AVs

Ford CFO John Lawler reconfirmed the company’s plans to launch a commercial self-driving business by 2022, however there wasn’t much discussion about it other than that.

Lawler and Farley said more details about Ford’s AV business, including Argo AI, which it jointly owns with Volkswagen AG, would come during a future event.

Miss: Dividend

Lawler said the company plans to “reinstate the dividend as soon as practical,” but noted the company is focused on improving its business, reinvesting and producing free cash flow at the moment.

He declined to give a specific timeline for the dividend to be reinstated. It was suspended March 2020 to shore up its cash as the coronavirus pandemic caused rolling shutdowns of auto plants globally.

– CNBC’s Michael Bloom contributed to this report.