We recently published a list of 13 Most Promising EV Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Ford Motor Company (NYSE:F) stands against the other most promising EV stocks to buy according to hedge funds along with the industry outlook.
According to a September 13 report by S&P Global, the auto industry’s shift to electric vehicles (EVs) is accelerating, with 2026 seen as a pivotal year for adoption. By 2030, over 25% of new passenger cars sold are expected to be electric, as the transition away from internal combustion engines (ICE) gains momentum.
Major automakers are projected to produce over 70% of global EVs by 2030, up from just 10% in 2022. However, a few challenges remain, like range anxiety, especially for those without convenient charging options. Addressing these issues will require collaboration among automotive, utilities, government, and property owners, which could create a way for significant growth in vehicle electrification and potentially end the ICE era.
We discussed the market dynamics of the EV industry in our article, 11 Small Cap EV Stocks to Invest In. Here is an excerpt from the article:
“While the growth in the US and Europe is slowing down, China is picking up a significant pace and dominating the EV landscape. According to a World Economic Forum report, Chinese EVs are much cheaper than their Western counterparts, with an average price of $34,400, compared to $55,242 in the U.S. The price gap is driven by lower labor costs, favorable government subsidies, and more affordable battery sourcing.
Chinese automakers now produce more than half of the world’s EVs and are using their cost advantages to potentially dominate the global market. As Chinese brands gain scale and expertise, their competitive pricing could allow them to challenge Western automakers.”
The Electric Vehicle Shift and Its Economic Impact on Europe
While Europe saw significant adoption of EVs in the earlier years, it has seen a slowdown. According to an October 3 report by McKinsey, the growth of EVs in Europe poses both opportunities and challenges for the automotive industry, which currently contributes $1.9 trillion to the economy.
While electric mobility could add up to $300 billion in gross value added (GVA) by 2035, the industry could risk losing $400 billion if European OEMs’ global market share declines from 60% to 45%.
Key strategies for success include expanding the domestic battery supply chain, improving manufacturing capabilities, streamlining regulations, and investing in R&D and talent development. By proactively addressing these challenges, European OEMs can capitalize on the EV shift, generate new value, and secure the region’s economic future in the automotive sector.
Shifting Gears to the Inevitable Future of Electric Vehicles
In a CNBC interview, Young Liu, Chairman of Hon Hai Technology Group said that the future of the automotive industry will be dominated by electric vehicles, with hybrids playing a limited role due to advancements in battery technology. He made a note of current challenges such as charging times and range anxiety, but expects improvements in battery systems will eliminate the need for hybrids.
Liu outlined a path to profitability for EV companies based on three key strategies: “platformization, modularization, and standardization”. He believes these will help streamline operations and reduce the need for individual investments in proprietary platforms, which is a challenge for traditional manufacturers due to their existing structures.
Our Methodology
For this article, we used stock screeners and ETFs to identify over 40 companies with significant operations related to the EV industry. Next, we narrowed our list to 13 stocks most widely held by institutional investors. The most promising EV stocks are listed in ascending order of their hedge fund sentiment which was taken from Insider Monkey’s Q2 database of 912 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A Ford truck roaring down a highway, with powerful headlights blazing its way.
Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 47
Ford Motor Company (NYSE:F) is a well-established car manufacturer with a diverse range of vehicles under the Ford and Lincoln brands. Through its electrification strategy, the company seeks to upgrade key models like the Mustang, F-150, and Transit to electric versions, including the already available Mustang Mach-E and F-150 Lightning.
The company is also expanding its manufacturing capabilities with significant investments, including the Rouge Electric Vehicle Center, as part of its goal to achieve carbon neutrality by 2050. Additionally, it is focusing on improving battery technology, including solid-state batteries.
However, due to increased competition and a decline in global EV sales, Ford (NYSE:F) has reduced its EV operations and is shifting focus to hybrid technology. This strategy allows consumers to transition gradually to new technologies. Ford plans to offer hybrid options across its entire Ford Blue lineup in North America by the end of the decade.
For the third quarter, Ford (NYSE:F) reported a 4% increase in U.S. retail sales, outperforming the overall market, which saw flat sales. Total sales rose by 1%, while the broader industry experienced a 2% decline. The company experienced a 12% increase in EV sales and is the leading hybrid truck seller, which captures 77% of the segment, according to the company.
Sales of the F-150 hybrid jumped by 64%, while Lincoln saw a 26% increase in sales, with the Nautilus achieving its best third-quarter performance since 2007. New Explorer sales rose by 25% following its recent launch.
Ford’s (NYSE:F) electric vehicle sales are up 45% year-to-date, with significant gains from the F-150 Lightning and the E-Transit van. The Ford Pro Intelligence software platform also saw a 30% rise in active subscriptions, now totaling approximately 620,000.
Finally, Ford and Lincoln dealerships provided over 1 million remote service experiences in Q3, a sign of a growing trend in customer convenience. The company’s strategy of offering diverse powertrains appears to resonate well with consumers, which is contributing to its strong sales performance.
One of the company’s biggest growth catalysts is its focus on smaller, more affordable EVs. In our article about best EV stocks under $50 article, we shared the CEO’s comments about its plans. Here is an excerpt from the article:
“The company’s CEO, Jim Farley announced plans to introduce a $30,000 all-electric vehicle in about two and a half years, emphasizing that profitability is a key focus. During the Aspen Ideas Festival held around the last week of June, Farley revealed that this vehicle, developed by a specialized Ford team, is intended to compete with Chinese automakers like BYD and an upcoming entry-level Tesla (NASDAQ:TSLA) model.
Ford (NYSE:F) is prioritizing smaller, more affordable EVs over larger all-electric trucks and SUVs, as Farley believes the latter is unlikely to be profitable due to the high costs of large battery packs. He highlighted the need for a shift in focus to smaller vehicles for both economic and environmental reasons, despite the historical profitability of larger vehicles like the company’s trucks.”
Overall F ranks 3rd on our list of most promising EV stocks to buy according to hedge funds. While we acknowledge the potential of F as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than F but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
