Ford Motor Co. announced on Feb. 5 that the US Justice Department and California Air Resources Board have closed their investigation into the automobile manufacturer’s emissions certification process with no further action required.
However, a review of the company’s certification process by the US Environmental Protection Agency (EPA) and Environment and Climate Change Canada is still ongoing, according to an SEC filing.
Ford Motor (F) said that the closure of the investigation was “consistent with the company’s own investigation and conclusion that we appropriately completed our certification processes,” according to a Reuters report. The carmaker, however, did not release the findings from its own investigation.
About two years ago, Ford reported that a few of its employees had raised concerns regarding the testing for its emissions certifications, which is part of the US fuel economy and emissions compliance process. The employees were concerned about the analytical models used by the company for emission certification testing. At that time, the company had hired an outside agency to investigate its testing and applications for emission certifications.
“The matter focused on issues related to road load estimations, including analytical modeling and coastdown testing. The potential concern did not involve the use of defeat devices,” according to the SEC filing.
Earlier this month, Ford announced a plan to invest $29 billion through 2025 in the development of electric vehicles (EV). Additionally, Ford reported that its January car retail sales results showed that it has beaten the overall industry by 4%. Special Utility Vehicles (SUVs) were the best performers as sales of Ford SUVs grew 8.7% compared to Jan. 2020, giving them their best-ever January start. (See Ford Motor Co. stock analysis on TipRanks)
On Feb. 4, following Ford’s 4Q results, Deutsche Bank analyst Emmanuel Rosner raised the stock’s price target from $11 to $12 but reiterated a Hold. Rosner said that he was encouraged by the company’s 4Q results and its growing investment in electric vehicles.
The rest of the Street is in line with Rosner’s view with a Hold consensus rating. That’s based on 4 analysts recommending a Buy, 5 analysts suggesting a Hold, and 2 analysts suggesting a Sell. The average analyst price target of $10.71 implies 7% downside potential to current levels. Shares of Ford closed 1.2% higher at $11.51 on Feb. 5.