Private electric vehicle company Lordstown Motor presented its new truck, the Endurance, at a major event in Ohio with speeches by Energy Secretary Dan Brouillette and Vice President Mike Pence.
But another truckmaker investors might have heard of, Ford Motor (ticker: F), also released a truck yesterday. The new 2021 F-150.
But the Ford event did not generate as much anticipation as the Lordstown event. There are no notes from Wall Street analysts about it. And frankly Barron’s The Endurance launch story came before our F-150 coverage.
That is puzzling in one respect. Workhorse Group (WKHS), a company with a 10% stake in Lordstown Motors, is worth less than $ 1 billion. Ford’s market capitalization is over $ 23 billion. And the Ford F-150 is the best-selling family of vehicles in the United States, generating billions a year. Lordstown has no sales yet, only initial orders.
Investors also yawned at Ford’s launch. Ford shares fell 2.8% on Thursday. The workhorse stock, on the other hand, gained 5.1%.
But Wall Street loves growth, so the disparity in coverage makes sense. Electric vehicles are all the rage right now. Sales at EV Behemoth Tesla (TSLA), for example, are expected to grow approximately 50% in 2021 compared to 2019 levels. Ford sales are expected to decrease approximately 9% between 2021 and 2019.
But investors should pay attention. The F-150 remains a truck standard, a very lucrative segment of the US vehicle market.The F-150 is the truck that new EV manufacturers are chasing.
The new F-150 comes in a hybrid configuration with other features like power generation, a 700-mile range on a gas tank, and up to 12,000 pounds of towing capacity.
Ford plans to offer an all-electric truck eventually, but also owns a stake in startup EV Rivian, which plans to sell its EV light truck later in 2020. Tesla’s Cybertruck and an offering of all-electric trucks from General Motors (GM) are expected. in 2021.
Much of the value of Ford and GM shares is tied to trucks. Investors will have to decide in the future whether GM and Ford will maintain their market share as the trucks become electrified, or whether some of the new upstarts will have a chance.
It is too early to answer that question, but the answer will determine if Ford and GM are good investments at recent prices.
Ford shares are down 37% so far this year, while GM shares are down 33%. Both figures are much worse than the comparable returns of the Dow Jones Industrial Average and S&P 500 in the same span.
Ford shares are trading at only 15 times the estimated earnings for 2021. GM is trading at 6.3 times the estimated earnings for 2021. Tesla, on the other hand, is trading at approximately 77 times the estimated earnings for 2021. Workhorse, not expected to make earnings in 2021.
Write to Al Root at [email protected]