On May 2nd, the legendary automaker Ford Motor (NYSE: F) reported stellar first quarter results as it ramps up EV production, a week after its Detroit peer General Motors (NYSE: GM) did the same while also raising its 2023 guidance.
Today, a disruptive EV player whose revolutionary tonneau covers will be equipping pickup trucks from nine automotive manufacturers, Worksport Ltd. (NASDAQ: WSKP), revealed its $4 million custom European manufacturing line has been installed at its NY facility, making the company a step closer to focusing on revenue growth.
Worksport Enters The Training And Testing Phase
After receiving the manufacturing line earlier than expected in March, Worksport has now completed the installation of the equipment and is, therefore, able to begin training its staff. The training phase should take several weeks and it will be followed by numerous test runs. Worksport also began building the assembly line at its 220,000 square feet West Seneca, New York factory.
What's In Store?
When production begins, Worksport's hard-folding tonneau covers are expected to reach the market right away. Worksport will be providing an update on its newly redesigned portable COR HD advanced hot-swap battery system, which must be tested and completed before the solar-powered SOLIS cover becomes available for sale.
Ford Reports A Stellar Quarter
Despite growing losses on the EV front, fleet and legacy operations have enabled Ford to top Wall Street estimates for its first quarter results. CFO described the reported quarter as being a "peek at what's possible to generate value and growth", only months after CEO Jim Farley admitted that last year, execution issues disabled Ford from capitalizing on $2 billion it made in additional profits. This time, Farley reported that Ford is making real progress on its Ford+ growth plan.
Ford's First Quarter Figures
With automotive revenue of $39.09 billion topping the $36.08 billion Refinitiv expected, total revenue, which includes the impact of Ford Credit, grew 20% YoY as it amounted to $41.5 billion. Adjusted earnings per share amounted to 63 cents and topped Refinitiv's estimate of 41 cents. Net income amounted to $1.8 billion or 44 cents per share. Although it is a dramatic difference from 2022's comparable quarter when Ford made a net loss of $3.1 billion, or 78 cents per share, this figure was dragged down by a one-off charge related to Ford's EV investment in Rivian Automotive Inc (NASDAQ: RIVN).
Ramping up EV production came with widening operational losses as they increased from 2022 quarter's $380 million to $722 million. Ford washed off its EV losses with its traditional automotive business named Ford Blue that earned $2.6 billion as well as Ford Pro fleet operations that earned $1.4 billion. Moreover, management stated that both businesses were profitable in every single region where they operate. This is the first time Ford is reporting results of its individual business segments.
Ford Reiterated Its Full Year Guidance
Unlike General Motors who raised its full year guidance, Ford still expects full-year adjusted earnings to be in the range between $9 billion and $11 billion despite the significant beat. Capital expenditures are expected to be in the range between $8 billion and $9 billion, with EV operations named as "Model e" expected to result in losses of about $3 billion. Model e is expected to reach a positive EBIT margin of 8% by the end of 2026. But despite results and raised guidance, General Motors' shares still fell as investors showed concern due to the unstable environment and price war that was initiated by Tesla Inc (NASDAQ: TSLA).
Efforts To Catch Up To Tesla
Earlier on Tuesday, Ford revealed that it will once more be slashing the starting prices of its EV, Mustang Mach-E, expecting on average $5,000 in build-cost reductions. These discounts will be aided by switching from lithium ion to lithium-iron phosphate batteries but Ford still needs to decide what will its EV identity be: growing fast at a cost like Tesla or prioritizing a cost discipline approach. Last month, Tesla's CEO, Elon Musk, confirmed that it will be putting growth ahead of profits in this weakened macroeconomic climate. However, Tesla's strategy also implies that its vehicles are expected to generate significant profit over the long haul due to autonomy. Even Tesla's investors and supporters got worried after the latest quarterly report with Musk showing willingness to further sacrifice margins in exchange for market share, with some wondering is it truly a move to disrupt or one of desperation, but Musk assured that the aggressive price cuts are merely a short-term strategy while Tesla's long-term margins remain protected.
Moving Forward Despite All Challenges
With the EV price war having kicked off into high gear and the macroeconomic fears of an upcoming recession beginning to materialize, investors will be up for many more nights, but Ford and General Motors continue going full speed ahead with Worksport getting the industry another step closer to an electric and greener future of transportation.
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