Ford Motor Co (NYSE: F) opened in the red today after announcing plans of ending its EV dealership programme.
Why is Ford pulling the plug on EV-certified?
The initiative dubbed “EV-certified” was announced amidst exceptional demand for electric vehicles in September 2022.
But $F is pulling the plug on that programme as the EV optimism is now fading fast. The legacy automaker is still growing its electric vehicles sales but at a pace that far lags its initial expectations.
“The world has changed. The growth has slowed down”, said Marin Gjaja – the chief operating officer of Ford Motor’s Model e in a media briefing today.
Ford stock pays a rather lucrative dividend yield of over 5.0% but is currently trading at roughly the same price at which it started the year 2024.
Ford EV certification programme led to lawsuits
The EV certification programme of Ford Motor initially demanded investment worth about $1.0 million from store owners to sell electric vehicles.
The initiative met with controversies that even led to lawsuits from dealers over its two year tenure. Moving forward, EV sales will be open to all dealers that will likely “help us grow our sales”, Ford said on Thursday.
Dealers will still have to invest in some EV-related expenses including charging and training. But these investments will be nowhere near as much as the now obsolete certification programme, it added.
Wall Street currently has a consensus hold rating on shares of Ford.
Could Ford stock gain in the back half of 2024?
Ford’s announcement on its EV dealership programme arrives only weeks after Bernstein analyst Daniel Roeska recommended buying the automotive stock that he’s convinced could hit $16 by the end of this year.
Roeska saw a “clear path to profits for the company’s EV unit” even though Model e lost a whopping $4.7 billion in 2023.
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