Ford’s New Mantra: Ohm, Ohm …

Not that long ago, I ruffled the feathers of the Tesla (Nasdaq: TSLA  ) flock by suggesting that the acceptance of the electric car might be better served by the introduction of commuter-oriented, affordable electric vehicles for the masses, rather than drag racing “hood ornaments for the eco-conscious wealthy.”

My argument was that it took millions of Model Ts pouring out of Henry Ford’s factories for the automobile to become something more than a luxury item, and that it will take a magnitude of electric vehicles on the road, more than Tesla could ever sell at a starting price of $57,400 (for the Model S sedan, before any tax credits) for the electric car to ever be taken for a practical transportation alternative -- not to mention,  a profitable product.

Henry Ford with the Model T
Source: Ford Motor Company

What would Henry do?
Here comes Ford (NYSE: F  ) again, a century after the Model T was introduced, announcing its commitment to the future of the electric vehicle, with a $135 million investment in next-generation batteries and other electric vehicle components. It is also, according to this release, “dedicating a 285,000-square-foot research and development lab … to focus almost entirely on hybrids and electrification.” Ford’s newly introduced Focus Electric should be the recipient of any breakthroughs this dedication to electrics should bring.

Henry Ford’s great grandson Bill Ford with the Focus Electric.
Source: Ford Motor Company

The Focus Electric’s list price of $39,995 is still not quite in the range of the mid- and lower- middle classes, but it does edge closer to affordability after a federal tax credit of $7,500, and -- if you live in the Golden State -- a $2,500 California rebate.

The all-electric Nissan Leaf, at $35,200 and General Motors’ (NYSE: GM  ) plug-in hybrid Chevy Volt, at $39,145 (before any credits), are also still not candidates for most suburbanite's driveways.

No, there aren’t any electric-Model T candidates on the road, as yet, but Ford’s touting of its efforts to put even more resources into its electric vehicles program can only help all electric car manufacturers -- especially Tesla.

Electric is still an acquired taste, like an expensive single-malt scotch. No one’s been able to put it in a six-pack, quite yet. Will Ford be the first?

Ford’s investment in electric vehicles reveals a company that has a clear long-term vision. At the same time, the setbacks in Europe have placed short-term pressure on its stock. Have these short-term pressures created an incredible buying opportunity, or are there other hidden risks with the stock that investors need to know about? To answer that, one of our top equity analysts has compiled a premium research report with in-depth analysis on whether Ford is a buy right now, and why. Get instant access to this premium report. 

Fool contributor Dan Radovsky has no financial position in the above-mentioned companies. The Motley Fool owns shares of Ford Motor and Tesla Motors. Motley Fool newsletter serviceshave recommended buying shares of Tesla Motors, Ford Motor, and General Motors. Motley Fool newsletter serviceshave recommended creating a synthetic long position in Ford Motor. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1987466, ~/Articles/ArticleHandler.aspx, 10/22/2014 5:39:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement