When Ford (F) topped over $24 in January, it marked a peak. Competitor General Motors (GM) touted
its multi-decade electric vehicle plans. Rivian (RIVN) had not yet fallen below $100.
Ford owns a stake in Rivian. Due to insider lock-up, it could not sell RIVN stock fast enough. The
company reported massive capital gains from its holdings in the fourth quarter. Since then, it needed to
reveal its shrinking profits.
Without the Rivian premium, investors turned to Ford’s deteriorating core business. The Mach-E EV
doubled in sales Y/Y by only a few thousand units. Fortunately, its EV sales freeze, due to a potential
safety defect, will not cost much to address.
On June 14, Ford issued stop-sale order with dealers. The EV could become mobile. A high voltage
battery main contactor could result in the vehicle immediately losing propulsion power while in use. This
is a serious issue.
Tesla (TSLA) had many recalls over the year. Its issues are less serious and far less expensive to fix. For
example, Tesla could address most of its recalls with a software update. Fortunately, Ford will fix this
battery issue with a software update.
Ford’s falling sales and recall could hurt investor sentiment. Together with a bear market, F stock could
fall below $10.00.
