The melt-up rally in automotive stocks is unusual. Car dealers are stuck with top-end trucks and SUVs that they cannot sell. They do not have enough affordable cars in the $20,000 range to offer. Yet Ford Motor (F) and Stellantis (STLA) stopped falling.
Is Ford’s Hybrid strategy reset enough to improve its business fundamentals?
Ford said on Wednesday that it would take steps to achieve profitability, capital efficiency, and growth in its electric vehicle business. This is a goal that is hard for Ford to meet. The EV unit lost billions.
Ford will offer EVs in the lower price range while raising the vehicle’s range. It will prioritize the launch of a digitally advanced commercial van next year. In 2027, it will introduce two new advanced pickup trucks. The firm will also source batteries that cost less.
European firm Stellantis said on August 10, 2024, that it would cut around 2,450 workers at its Michigan plant. It is winding down the production of the Ram 1500 Classic truck.
UAT chief Shawn Fain criticized Stellantis’s CEO for price gauging. Furthermore, it accused the firm of failing to meet commitments from its negotiated labor contract.
Stellantis is in no position to meet production targets. Demand for vehicles fell sharply. The firm must cut output and prices. Until this happens, unit inventory levels will keep rising at dealerships.
