Ford (F) Revs Up EV Investment, Bumps Up Stake In Rivian

Ford (NYSE:F) recently bumped up its investment in Rivian, an electric car start-up, along with the existing backers Amazon (NASDAQ:AMZN) and Blackrock (NYSE:BLK). It has been an impressive year for Rivian, with the company raising another $1.3 billion in the last leg of 2019. Rivian kicked off 2019 with a $700-million funding round led by Amazon. Notably, in April 2019, Ford Motor Company had also made an investment of $500 million in Rivian for the production of Electric Lincoln SUV utilizing Rivian's skateboard platform, the launch of which is due in 2022. In September, it raised another $350 million from Cox Automotive.

Rivian’s electric pickup truck, the Rivian R1T, and a seven-seater SUV, the Rivian R1S, rely on the company’s skateboard architecture, which brings together the electric motors, batteries, brakes, and other electronics into a single unit. Rivian will offer different ranges and the choice of all-wheel drive, rear-wheel drive, or front-wheel drive to Ford by simply adjusting the battery-pack size. Rivian and Ford will also be collaborating on a new Ford group product using the skateboard platform.

Further, Ford announced plans to expand one of its marquee models, the Mustang muscle car, with an all-electric sport utility vehicle, Mustang Mach-E SUV this November. It features the all-new infotainment system, with the latest connected-vehicle technology. The model is set for a late 2020 launch, with prices starting at $43,895.

Moreover, Ford is actively working to introduce freshmodels of autonomous and electric vehicles, which seem to be the future of the auto industry. These initiatives are likely to boost Ford’sprospects. The firm plans to produce self-driving cars by 2021. In addition, it intends to launch 30 vehicle models in China by 2025, of which one third will be electric vehicles (EVs).

EV Market Revolution

A host of factors such as pollution issues, technical superiority, stricter fuel-emission standards, and increasing adoption by both automakers and customers have turned the fortunes in favor of electric vehicles. Automakers have turned their attention to fully-electric vehicles and taken key positions to invest in the segment. As more auto giants step into the electric vehicles market space in order to keep investments flowing, the global electric cars fleet is bound to increase at a fast pace in the near future. The electric vehicle market is expected to witness a CAGR of 25.6% during the 2019-2026 period. By 2026, the market is estimated to reach more than $567.2 billion, according to Acumen Research and Consulting.

Zacks Rank & Stocks to Consider

Ford currently carries a Zacks Rank #3 (Hold). Year to date, shares of Ford have outperformed the industryit belongs to. Its shares have appreciated 31.6% compared with the industry’s rise of 26.9%.

Some better-ranked stocks in the Auto-Tires-Trucks sector include Weichai Power Co. (OTC:WEICY) , Spartan Motors, Inc. (NASDAQ:SPAR) and SPX Corporation (NYSE:SPXC) . While Weichai Power flaunts a Zacks Rank #1 (Strong Buy), Spartan Motors and SPX carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Weichai Power has a projected earnings growth rate of 6.11% for the current year. Its shares have surged86% over the past year.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have soared161.9% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The stock has appreciated 99.2% in the past year.

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