Ford (NYSE:F) is planning to reduce its future investments in China due to strict competition from local carmakers. Ford CEO Jim Farley believes that local rivals like BYD and Changan will continue to provide vehicles at drastically reduced prices. There is therefore no assurance that foreign companies will be able to win a sizable market share in the country.
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Furthermore, the price war triggered by Tesla (TSLA) in China considerably impacted the profit margins of global automakers. So Ford has shifted its focus to higher-margin commercial vehicles, such as delivery vans in China. Meanwhile, taking into account the nation’s digital progress and its position as the largest EV market, Ford aims to keep a close watch on battery development in the country.
Importantly, last month, Ford revealed plans to construct battery manufacturing in Michigan this month, utilizing license technology from Contemporary Amperex Technology Co. Ltd. in China.
Earlier in April, Ford disclosed plans to turn one of its joint ventures in China into an export hub for affordable commercial electric and combustion vehicles. The business is also attempting to reduce prices in the region.
Is Ford Stock a Good Buy Now?
Turning to Wall Street, Ford stock has a Hold consensus rating based on five Buy, five Hold, and two Sell ratings. The average F stock price target is $14.25, implying 22.4% upside potential.
Interestingly, hedge funds are bullish on the stock. As per recent 13F filings, hedge funds bought 1.6 million shares of Ford in the last quarter. This includes Fisher Asset Management’s Ken Fisher and Echo Street Capital’s Greg Poole.
