Ford Motor (F)’s decision to stop production and shipments of its electric pickup truck further undermines our confidence in the automaker. We have little patience for further missteps and are willing to exit this long-held position if there is no significant reversal this quarter. The company announced on Tuesday that it had imposed a delivery halt and production pause on its F-150 Lightning electric pickup truck last week due to a potential battery issue. The announcement comes just a day after Ford said it would work with Chinese supplier Contemporary Amperex Technology Co. on a new $3.5 billion electric vehicle (EV) battery plant in Michigan — a move that should help to increase production. Ford delivered chaotic fourth-quarter results just under two weeks ago that disappointed investors like us and sent shares plummeting. CEO Jim Farley said the weak earnings were a function of the automaker’s transition to a new business structure that limited production capacity, coupled with poor execution. Last year, Ford announced it would split its electric and internal combustion engine vehicles into separate divisions called Ford Model e and Ford Blue, respectively. Farley told CNBC earlier this month that Ford is still working with higher-than-expected costs, a shortage of semiconductor chips and supply chain difficulties to generate better profits in its EV division. In late January, Ford announced that it was reducing prices for its Mustang Mach-E electric crossover while increasing production, weeks after electric vehicle industry leader Tesla (TSLA) made a similar move. Shares of Ford slipped more than 1% to $12.94 a share in Tuesday afternoon trade. The Club Take Following Ford’s fourth-quarter results on Feb. 3, Jim Cramer drew a line in the sand. “It’s unforgivable that Ford had a bad quarter,” Jim said at the time. “We’ll ramp up the stock if this quarter doesn’t go well,” he added. A battery issue is of particular concern as Ford is betting its future on electric vehicles but can’t make the vehicles fast enough to meet consumer demand. We’ve given management another quarter to get it right. But if Farley can’t show serious progress when the company reports its first-quarter results, we have no choice but to divest the stock. (Jim Cramer’s Charitable Trust is Long F. For a full list of stocks, click here.) As a subscriber to CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling any stock in his charitable foundation’s portfolio. When Jim spoke about a stock on CNBC television, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS GOVERNED BY OUR TERMS AND CONDITIONS AND PRIVACY POLICY ALONG WITH OUR DISCLAIMER. NO OBLIGATION OR OBLIGATION SHALL BE OR CREATED BY YOUR RECEIVING OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC RESULT OR PROFIT IS GUARANTEED.
Ford CEO Jim Farley pats a Ford F-150 Lightning truck before announcing at a news conference that Ford Motor Company will be working with the world’s largest battery company, a China-based company called Contemporary Amperex Technology, to build a battery factory for electric vehicles to be erected at Marshall, Michigan on February 13, 2023 at Romulus, Michigan.
Bill Pugliano | News from Getty Images | Getty Images
Ford engine (F’s) decision to stop production and shipments of its electric pickup truck further undermines our confidence in the automaker. We have little patience for further missteps and are willing to exit this long-held position if there is no significant reversal this quarter.
