Electric vehicles
Ford Motor Company (NYSE:F)’s share of EVs in the U.S. has grown to nearly 16% this year through June, which is quadruple what it was last year. Ford’s success in EVs is part of the reason that it has been able to fuel its overall market share growth in the U.S. by a full percentage point – the most by any full-line automaker, according to the company.
Photo credit: Ford Motor (NYSE:F) Company press release.
Ford’s success derives from a slew of vehicle options, as shown above. Now I understand that Tesla Motors Inc (NASDAQ:TSLA)’s Model S shouldn’t be directly compared to Ford Motor Company (NYSE:F)’s models because it isn’t an apples-to-apples comparison. However, when Elon Musk brings out the mass-produced vehicle at perhaps half the cost of the Model S the lines of competition between Tesla Motors Inc (NASDAQ:TSLA) products and Ford’s hybrids and EVs will definitely begin to blur.
Those who think that Tesla Motors Inc (NASDAQ:TSLA) is the future of the industry may be correct, but those same people often think that juggernauts like Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM) and Toyota Motor Corporation (ADR) (NYSE:TM) will simply roll over and die – which I believe to be very foolish.
Ford Motor Company (NYSE:F) will be expanding electrification engineering jobs by nearly 50% to have more than 500 salaried employees working on research and development. It’s also investing $50 million in EV development centers to further strengthen its vehicle quality. In addition to all that, Ford is also doubling its electrification battery-testing capabilities this year helping to speed hybrid and EV development by as much as 25%.
“This investment in new engineers and expanded facilities helps us prepare for growth,” said Raj Nair, group vice president, global product development in a Ford press release. “All of us at Ford Motor Company (NYSE:F) remain absolutely committed to offering customers a choice of leading fuel-efficient vehicles – from EcoBoost-powered gasoline engines and hybrids to plug-in hybrids and electrified vehicles.”
Tesla isn’t the only one that has to keep an eye on Ford’s progress. According to Ford, last month 64% of C-MAX hybrid buyers switched over from non-Ford brands. Toyota Motor Corporation (ADR) (NYSE:TM)’s Prius was the vehicle most often traded in for the C-Max – contributing to why Toyota’s share in the EV market dropped eight share points while Ford’s claim jumped 12 share points.
Bottom line
Only time will tell how Tesla Motors Inc (NASDAQ:TSLA) fares in the U.S. market as its groundbreaking vehicles continue to gain popularity and perhaps decline in price. Tesla as a company is very impressive and is disrupting an automotive industry that has long been dominated by the same old model of using internal combustion engines. One thing we know for sure is that businesses adapt or die, and as demand grows for vehicles such as Tesla’s Model S, you can bet that Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), and Toyota Motor Corporation (ADR) (NYSE:TM) will eventually join the party in full force by throwing hundreds of millions of dollars into research and development, which will change everything. To put it bluntly, I’m rooting for Tesla but I’m staying on the sidelines and avoiding a long position for now – Ford seems like a safer bet with plenty of room to run for investors.
The article Look out Tesla, Here Comes Ford originally appeared on Fool.com and is written by Daniel Miller.
Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford, General Motors, and Tesla Motors (NASDAQ:TSLA). The Motley Fool owns shares of Ford and Tesla Motors.
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