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Ford Begins Pre-Production of F-150 Lightning as Demand Surges

Global automaker Ford Motor Company (F) announced that it is commencing with pre-production of the electric F-150 Lightning truck as demand surges. Shares rose 1.4% on the news, closing at $13.40 on September 16. (See Ford stock charts on TipRanks)

With the electrification of vehicles accelerating globally, Ford has committed to invest $30 billion in EVs through 2025. Last year, Ford started construction of the Rouge Electric Vehicle Center in Dearborn, Michigan, with an initial investment of $700 million, while this year, it has already started testing its ambitious all-electric truck.

The F-150 Lightning truck is considered a no-compromise, zero tailpipe-emissions truck with ingenious features and technology that are expected to improve over time. Ford said that it will begin the commercial sale of the trucks next spring, with a starting price of $40,000 and a targeted EPA-estimated driving range of 300 miles with the extended range battery.

Ford has received 150,000 reservations for the F-150 Lightning to date. The company has invested a further $250 million and added another 450 direct jobs across three of its facilities in Michigan to boost production capacity to 80,000 trucks per year. Since 2016, Ford has invested $7.7 billion and created around 7,000 jobs in Michigan to date.

At the three plants in Michigan, most of the assembly work for the F-150 truck will be carried out at the Rouge Electric Vehicle Center. Notably, Rawsonville Components Plant assembles the batteries, and Van Dyke Electric Powertrain center will supply electric motors and electric transaxles for the EV truck.

Bill Ford, Executive Chair, Ford Motor Company, said, “We knew the F-150 Lightning was special, but the interest from the public has surpassed our highest expectations and changed the conversation around electric vehicles. So, we are doubling down, adding jobs and investment to increase production.”

Ford added, “This truck and the Ford-UAW workers who are assembling it in Michigan have a chance to make history and lead the electric vehicle movement in America.”

Recently, Wells Fargo analyst Colin Langan maintained a Buy rating on the stock but reduced the price target to $17 (26.9% upside potential) from $18.

In an Autos and Auto Parts research report, the analyst noted that the growing semiconductor shortage is a primary factor in the decline of auto values as investors lost patience waiting for markets to rebound.

However, Langan said, “Most auto demand indicators remain positive, and therefore we are optimistic in the long-term recovery once semiconductor supply improves. We expect value to outperform (again) once companies update their outlook for lower production & investors have line of sight to a multi-year auto-recovery.”

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 6 Buys and 3 Holds. The average Ford price target of $16.26 implies 21.3% upside potential to current levels. Shares have gained 84% over the past year.

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