Ford Motor Company (NYSE:F) is putting the brakes on its aggressive pivot towards an all-electric future in Europe. According to a recent Reuters report, the automaker plans to launch several gas-powered vehicles and hybrid models in Europe beyond 2030, diverging from its original strategy.
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Here’s Why Ford is Changing its Strategy
Ford and other automakers are witnessing a deceleration in the demand for electric vehicles (EVs). The prolonged high interest rates and insufficient charging infrastructure in Europe have dampened EV demand. Additionally, intense price competition in the global EV market has squeezed profit margins, prompting companies to broaden their product offerings to include gas and hybrid models.
Ford earlier announced a price reduction for its 2023 Mustang Mach-E model to stimulate demand. Additionally, Ford announced a reduction in the price of its electric F-150 Lightning pickup trucks. Moreover, in January, the company revealed plans to adjust production of the F-150 Lightning to strike a better balance between production capacity, sales expansion, and profitability.
It’s worth noting that its rival General Motors’ (NYSE:GM) initiative to go all-electric met with challenges. Some of its influential dealers urged the company to incorporate hybrid models into its product lineup. The hybrid models bridge the gap between EVs and gas-powered vehicles and are witnessing healthy demand.
Is Ford Stock a Good Buy Right Now?
Ford stock has gained about 9% in one year, underperforming the S&P 500’s (SPX) 25.4% gain. Wall Street analysts are sidelined on Ford stock. It has received four Buy, five Hold, and two Sell recommendations for a Hold consensus rating.
These analysts’ average price target on F stock is $14.58, implying 20.20% upside potential from current levels.
