Ford Motor Co. (NYSE: F) has officially entered the modern electric vehicle (EV) market, with the reveal of a new Mustang Mach-E on Sunday. Leveraging the power of its popular muscle car brand, the company promises high performance, efficiency, and profitability from its latest model.
Executives are hoping that the new car will compete directly with Tesla models by attracting mainstream buyers who are looking for alternatives.
Ford Will Keep Costs Low to Ensure Profitability
The new Mustang is vastly different from the gas-powered muscle cars that have sold more than 10 million units since 1964.
As an EV, the Mach-E takes on the form of a crossover SUV. This is a risky move by Ford. It could alienate some of the traditional audience for the brand, however, it could also bring new customers, especially younger ones, who would never have considered a traditional Mustang or similar performance car in today’s environmentally conscious marketplace.
Most important for investors is the fact that Ford promises that the car will be profitable.
Ford stopped producing its Focus EV last year due to low consumer interest and sales. It hopes that the Mach-E will be more appealing.
Ted Cannis, the global head of electrification, said on the weekend that “Every one of these that we sell, we’re going to make a lot more money. Every one that we make will make positive margin, both in Europe and the U.S., which is much better than we did with the Escape hybrid ten years ago.”
Ford will produce the Mach-E in Mexico, which will keep labor costs much lower than if it were to produce in the United States. Prices will start at $45,000.
While pricing will definitely be competitive in the wider auto market, will fall short of directly competing with the popular Tesla Model 3. Tesla sells a special order version of the Model 3 for $35,000. The average configuration ordered online is around $41,100.
Ford is Now a Viable Stock for Alternative and Green Investment
Anyone interested in the clean energy and alternative investment market can now consider Ford to be a contender. Stock is bargain priced below $10, and there could be significant upside if Ford manages a pain-free transition to a larger EV lineup.
Stock in the company is up 16.99% year to date, and the latest announcement could drive confidence during Monday trading.
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