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Can Ford Challenge Tesla’s Model 3 and Chevrolet’s Bolt in 2016?

Analysts Expect a Strong 1Q16 Earnings Report for Ford

(Continued from Prior Part)

Ford’s relation with innovation

Ford Motor Company (F) is the oldest mainstream automaker in the US. Starting with the development of the Model T and the moving assembly line, the company is well-known for its efforts to lead the auto industry in manufacturing affordable mass-targeted vehicles.

Currently, the rising demand for electric vehicles (or EVs) is grabbing the attention of mainstream automakers. In this part of the series, we’ll take a look at Ford’s plans to invest in electric vehicle development. It will be interesting to discover whether Ford is ready to challenge the Tesla Model 3 (TSLA) and the Chevrolet Bolt (GM) in its upcoming earnings announcement.

EV segment developments

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Recently, US electric vehicle maker Tesla unveiled its Model 3, its first mass-targeted vehicle. Tesla seems to be able to grab the attention of the auto industry by successfully demonstrating the growth potential of the EV segment. Tesla is likely to begin the deliveries of its Model 3 toward the end of fiscal 2017.

Meanwhile, General Motors (GM) also jumped in with its upcoming mass-targeted EV Chevrolet Bolt. However, GM’s decision to launch the Bolt looks to have been made in a hurry.

First, both the electric cars are likely to have the nearly similar driving range and pricing. Second, GM’s officials have suggested making the Chevrolet Bolt available in the market ahead of the Tesla Model 3.

Ford’s plans in EV segment

Currently, Ford’s electric vehicle segment presence is limited. The company produced its first full production electric vehicle, Ford Focus Electric, in late 2011. Nevertheless, Ford plans to invest $4.5 billion in electric vehicle solutions by 2020 looks quite impressive.

In addition, Ford has already announced its plan to launch 13 new electric vehicles by 2020. Therefore, it wouldn’t be a big surprise if Ford announces any of its new mass-targeted EV models during its upcoming earnings releases in 2016.

Of course, developing an EV is not the only task that an automaker needs to undertake. To make an EV successful it’s also crucial for the companies to develop and maintain EV-related infrastructure, including charging stations. Going forward, it will be interesting to see whether Ford can challenge Tesla’s Model 3 and the Chevrolet Bolt. Investors should watch out for announcements and references regarding Ford’s plans to go big on electric vehicles.

Among other automakers (XLY), Honda (HMC) also has expressed its intentions to expand its presence in the EV segment.

Continue to the next article to take a look at Ford’s valuation multiples ahead of its 1Q16 earnings.

Continue to Next Part

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