Ford Motor’s January sales results have drawn attention to a trend that car investors should be watching closely in 2024. Despite a 21% decrease from December, Ford reported selling 152,617 cars and trucks, which represents a 4% increase compared to the same month the previous year. January typically experiences slower sales as the holiday season purchases subside.
Although the numbers can be considered satisfactory, it’s important to note that while Americans bought approximately 15.5 million new cars and light trucks in 2023—an 11% increase from 2022—experts predict only marginal growth for 2024. Ford’s January sales figures align with this projection.
However, the performance of battery-electric vehicles was less encouraging. Mustang Mach-E sales reached 1,295 units, indicating a significant decline of 73% compared to December and a drop of 51% from the previous year. While the model’s longer time on the market could be a contributing factor, this substantial decrease has disappointed investors.
On the other hand, sales of the F-150 Lightning pickup truck remained relatively stable at 2,258 units on a year-over-year basis.
In terms of overall sales volume, battery electric vehicles accounted for approximately 3% of Ford’s total sales, while hybrid sales represented around 7%. Though there was a modest 7% decrease in hybrid sales from December to January, they saw a notable increase of 43% compared to the previous year.
Overall, Ford’s January sales numbers underline both positive and concerning aspects of their performance in 2024. The decline in battery electric vehicle sales raises questions about the company’s strategy and competitiveness in the evolving automotive market. It will be essential for Ford to address these challenges while capitalizing on the strength of their traditional vehicles to maintain their position in the industry.
Growth in Electric Vehicle Sales Raises Investor Interest
The year 2023 witnessed a significant surge in battery electric vehicle (BEV) sales in the United States, with approximately 1.2 million units sold—a notable 45% increase compared to the previous year. Simultaneously, plug-in hybrid (PHEV) sales also reached approximately 1.2 million units, sparking interest within the automotive investment community.
While Ford is known for its offerings of mild-hybrids that do not require plugging in, the market discussion primarily revolves around the growth trajectory of BEVs and PHEVs. In Europe and China, the ratio of BEVs to PHEVs stands at roughly 2:1. However, in the United States, these two technologies enjoy a more balanced distribution, with a ratio closer to 1:1.
This American preference for PHEVs has prompted automotive giant General Motors to explore the possibility of introducing PHEVs from other regions to the U.S. market. As car companies continue to navigate this dynamic landscape, sales trends of BEVs and PHEVs carry mixed implications.
While BEVs are yet to establish themselves as highly profitable assets, increasing their sales volume would undoubtedly contribute positively to the revenue stream of car manufacturers. Conversely, hybrids remain a lucrative segment for car companies.
For corporations that solely specialize in BEV production, slower growth in BEV sales can pose challenges. Even so, both Tesla and Rivian Automotive, which concentrate solely on BEVs, experienced notable growth in the United States in 2023. Tesla achieved a 25% increase in sales, while Rivian’s sales skyrocketed by an impressive 143%.
It is worth noting that Rivian’s success is attributed to its smaller base compared to industry leader Tesla. In 2023, Rivian sold 50,189 vehicles in the U.S., whereas Tesla’s sales totaled 654,888 units.
Following the release of these results, Ford’s stock experienced a marginal decline of 1.2% in Friday trading. However, this dip is unlikely to be solely due to the overall sales figure, as the underlying concern may stem from BEV sales performance. Conversely, the S&P 500 and Nasdaq Composite recorded slight gains of 0.2% and 0.6%, respectively.
Early trading witnessed a temporary decline in stock prices for both Tesla and Rivian, with Tesla experiencing a decrease of 2.2% and Rivian observing a 3.1% drop.
The growth in electric vehicle sales has undeniably captured the attention of investors, fostering ongoing speculation about the trajectory of these technologies in the automotive industry.