TLDR
- Ford Motor Company (F) is considered one of the most undervalued EV stocks according to hedge funds, with a forward P/E ratio of 7.63.
- Ford’s Model e division achieved $1.4 billion in cost reductions in 2024 despite investing in battery plants and EV development.
- The company anticipates Model e losses of $5-5.5 billion in 2025 due to pricing challenges and continued investments.
- Ford plans to inject up to €4.4 billion ($4.76 billion) into its struggling German operations to support its European business transformation.
- Ford’s vice chair John Lawler called on European policymakers to establish a clear agenda for promoting EVs and aligning emissions targets with consumer demand.
Ford Motor Company is making strategic moves to strengthen its position in the global automotive market. The American automaker announced plans to inject up to €4.4 billion ($4.76 billion) into its struggling German operations.
This substantial investment aims to address overborrowing at Ford-Werke and provide funding for a multi-year business plan. The decision comes as Ford works to revitalize its European business amid challenging market conditions.
“By recapitalizing our German operations, we are supporting the transformation of our business in Europe and strengthening our ability to compete with a fresh product portfolio,” said John Lawler, vice chair of Ford Motor Company.
Ford’s German arm will continue strategic transformation initiatives with a focus on reducing costs and increasing competitiveness. This move is part of Ford’s broader effort to adapt to changing market dynamics.
Lawler also emphasized the need for clearer policy support in Europe. He called on European policymakers to establish a clear agenda to promote electric vehicles and bring emissions targets in line with consumer demand.
The company is cutting thousands of jobs in Europe, with many of these cuts happening in Germany. This restructuring comes at a time when even domestic giant Volkswagen has been facing difficulties.
Europe’s car industry struggling
Europe’s car industry has faced numerous challenges recently. Plant closures have become necessary due to stiff competition from China that has impacted demand. The sector is also preparing for potential U.S. tariffs.
While addressing its European operations, Ford continues its transition toward electric vehicles globally. The company develops and delivers Ford trucks, SUVs, commercial vans, cars, and Lincoln luxury vehicles worldwide.
Ford’s Model e division, focused on electric vehicles, is currently in a phase of heavy investment despite facing market headwinds. In 2024, this division achieved $1.4 billion in cost reductions.
These savings came even with an extra $100 million spent on new battery plants and next-generation EV development. However, revenue declined by 35% year-over-year due to industry-wide pricing pressures.
Looking ahead to 2025, Ford anticipates Model e losses of $5 billion to $5.5 billion. The company attributes these projected losses to continued pricing challenges and ongoing investments in battery facilities.
Ford investing in new EV models
Ford is also investing in new EV models that are expected to launch within two years. Despite these short-term losses, the company remains committed to its electrification strategy.
The automaker is increasing its global EV volume, particularly through European launches. Its BOSK battery joint venture, a partnership for producing batteries later in 2025, is expected to generate cost savings via production tax credits.
Ford performed 9 million over-the-air updates in Q4 2024, with 80% addressing customer and warranty issues. It’s also implementing design improvements and enhancing software development to reduce EV costs.
The global EV market was valued at approximately $1.32 trillion in 2024, according to Grand View Research. This market is expected to expand at a compound annual growth rate of 32.5% between 2025 and 2030.
As of March 7, 2025, Ford had a forward price-to-earnings ratio of 7.63, making it one of the most undervalued EV stocks according to hedge fund managers. The company is held by 45 hedge funds, ranking it third among undervalued EV stocks.
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