Ford's Stock: A Rocky Road to EV Dominance?

The automotive world is in the middle of a seismic shift—from gas-guzzling giants to sleek electric vehicles—and Ford (F) is at the center of the battle. But is this a stock you can trust to navigate these choppy waters? Let's dive in.

The Dividend: Stability in a Chaotic Market
First, let's talk about the dividend. Ford just reaffirmed its $0.15 quarterly payout, which gives investors a 7.99% yield—a tantalizing return in a low-interest-rate world. But here's the catch: Ford is pouring money into its EV future while still losing cash on those very vehicles. The Model e division, which includes the Mustang Mach-E and F-150 Lightning, posted a $1.2 billion loss in 2023. Management vows to turn that segment profitable by 2026, but as we've seen with other automakers, promises are easy; execution is another story.

The EV Opportunity—and the Hurdles
EV sales are soaring. Ford's Q2 2024 EV sales jumped 61%, and analysts predict EVs could make up 29% of U.S. car sales by 2030. That's a massive tailwind. But here's the problem: Ford isn't Tesla (TSLA). While Elon Musk's company dominates headlines and market share, Ford is playing catch-up.

The Battleshares TSLA vs. F ETF (ELON)—which pits Ford against Tesla—tells you everything you need to know. Ford's stock trades at $9.39, down sharply from its peak. Investors are skeptical. Can Ford's electric trucks and SUVs carve out a niche? The jury's out, but one thing's clear: If Ford can't turn its EV division profitable by 2026, this dividend could be in jeopardy.

Supply Chain Nightmares—And How Ford's Fighting Back
Now, let's talk about the real elephant in the room: supply chains. Ford is battling two-headed monsters here. First, tariffs. The company faces a potential $2.5 billion hit from U.S. trade policies but is fighting back by rerouting shipments through bonded carriers and shifting production to U.S. soil. Second, China's grip on rare earth minerals—critical for EV batteries—is causing delays.

Ford's CFO, Sherry House, warns that China's export controls could disrupt production. Meanwhile, warranty costs are skyrocketing to $1.5 billion due to quality issues. This isn't just about money; it's about trust. If customers start doubting Ford's electric vehicles, this dividend stock could crater.

The Bottom Line: A Buy—But Wait for the July Report
Ford's stock is a rollercoaster. On one hand, you've got a high yield and a company that's doubling down on EVs. On the other, execution risks, supply chain headaches, and brutal competition loom large.

Here's my advice: Wait for the July 24 earnings report. If Ford shows progress on turning its EV segment profitable, and if supply chain costs are under control, this could be a steal at $9.39. But if the losses keep piling up or warranty costs explode? Run.

Backtest the performance of Ford (F) when buying on the day of quarterly earnings announcements and holding for 20 trading days, from 2020 to June 2025.
Historical data strengthens this approach. From 2020 to June 2025, buying Ford on earnings announcement days and holding for 20 trading days delivered an annualized return of 25.55% and an 81.69% overall gain. This strategy has historically capitalized on post-earnings momentum, suggesting patience could pay off.

Action Alert: Consider a small position in Ford, but set a tight stop-loss. And keep one eye on Tesla—because in this race, the competition is everything.

Disclaimer: This is not financial advice. Always consult a licensed professional before making investment decisions.