3 Indicators to Watch on Ford Q2 Earnings Day Meczyki.Net

While most of the automotive industry has faced a slowdown due to a lack of supply to meet the shortfall in demand, Ford has bucked the trend. At least in terms of sales targets so far this year.

Industry-wide, new vehicle sales in the US fell 20.3% to 3.53 million in the second quarter compared to the same period a year ago due to production constraints caused by supply chain constraints. Ford was one of the few automakers to report a profit of 1.8% with sales of 480,558 units. However, the growth was due to the strength of Ford’s trucks. Its new car sales have declined by 36 percent.

Now, with GM’s earnings report in rearview, all eyes are on Ford’s second-quarter results to determine where the US automaker stacks up and where it’s headed.

Several announcements in the past six months give some indication. Ford removed several tasks from its competition-on-global-EV stage to-do list. The automaker has taken steps to increase battery capacity and strengthen its supply chain, announcing plans to use lithium iron phosphate batteries for some of its vehicles and ramping up production of its new F-150 Lightning truck.

What analysts and Meczyki.Net will focus on

Analysts expect Ford to generate Q2 2022 earnings of 45 cents per share from revenue of $34.3 billion, according to data from Yahoo Finance. That’s a significant jump compared to the $26.8 billion in revenue and 13 cents per share Ford reported for the same quarter a year ago, suggesting that the company will cut its $50 billion bet on EVs by mid-decade. Starting to get results.

new model

Rivals from GM to Hyundai have unveiled new battery-electric models in recent weeks, but Ford has been relatively silent on future offerings. Instead, it has been focused on increasing the capacity of its F-150 Lightning pickup, Mustang Mach-E SUV and e-Transit commercial van.

We’ll hear back on Wednesday for any guidance on the automaker’s plans for its future lineup. This includes a second electric pickup that Ford CEO Jim Farley teased at the production launch of the F-150 Lightning in April.

Production

Ford and South Korea’s SK recently closed a deal to form an $11.4 billion joint venture to build and operate two EV battery plants in Stanton, Tennessee, the Blue Oval city complex and Glendale, Kentucky. The Stanton site will build Ford’s battery-electric F-150 Lightning pickup, as well as another, smaller pickup that Farley references.

The automaker reports strong demand for Lightning. We’ll be looking for an update on how well those deliveries are going as well as more information on Ford’s plans to increase capacity.

raw material

Like General Motors and other automakers, Ford is securing contracts with suppliers of the raw materials needed to make lithium-ion batteries. The company said it has sourced 70% of battery capacity to meet the 2026 global sales target of 2 million units.

Ford said adding lithium-ion phosphate (LFP) batteries to its portfolio will help reduce its material cost by 10% to 15%. In contrast to the prevailing nickel cobalt manganese (NCM) chemistry, LFP reduces the reliance on rare minerals such as nickel and cobalt.

The automaker will be putting its LFP battery packs in the Mustang Mach-E SUV in North America from next year, followed by the F-150 Lightning pickup truck in early 2024.

We’ll see on Wednesday how Ford plans to use this alternative chemical in its future EV lineup.