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Is Ford Stock a Buy After Boosting Electric F-150 Production?

By John Rosevear – Jan 4, 2022 at 9:48AM

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Demand for Ford's soon-to-debut electric pickup truck is huge, but there's more to the story.

Ford Motor Company (F 2.52%) is traditionally a slow-moving stock -- but not Tuesday. Shares have surged by more than 10% since the company announced this morning that it is preparing to boost its production capacity for the upcoming F-150 Lightning electric pickup to about 150,000 trucks per year. 

That's nearly four times the capacity that Ford had originally planned for its first electric pickup truck. The decision follows an all-out effort by Ford and its key suppliers to respond to huge consumer interest in the Lightning: Ford closed the Lightning's reservation system after receiving nearly 200,000 preorders from retail customers (along with additional interest from its commercial-fleet customers).

Ford also confirmed (again) on Tuesday that the F-150 Lightning is on track to begin shipping in the spring. The first group of retail reservation holders will be invited to convert their reservations into actual orders later this week.

Workers tend to a partially-assembled F-150 Lightning electric pickup at a Ford factory in Dearborn, Michigan.

Ford's new electric-truck plant in Michigan is building a final run of "pre-production" F-150 Lightnings now. Those trucks will be used for final quality testing. Production of trucks for customers will begin in the spring. Image source: Ford Motor Company.

Tuesday's news followed a similar announcement about Ford's current hit EV, the Mustang Mach-E crossover. The automaker originally planned to build about 50,000 Mach-Es per year, but in about a year, it will have the capacity to build more than 200,000 annually.

That's all great news for the company. But does it make Ford's stock a buy?

It's no secret that electric-vehicle stocks have drawn intense interest from investors over the last couple of years. Some of that interest seems to be rubbing off on 119-year-old Ford -- but I think that whether it's a buy now depends to some extent on your expectations.

Remember, Ford isn't a hot start-up. It's a mature industrial giant that is revamping itself in positive ways with impressive new products. (It's probably not a 10-bagger from here, in other words.)

That said, I do think that Ford's bottom line is set to expand nicely over the next few years as its recent product-line overhaul starts to pay off, and as its new connected vehicles (which include both the EVs and some of its traditional gas-sipping offerings) enable it to profit from new recurring-revenue services. 

CEO Jim Farley and his team have shown over the last year that they have Ford on the right track. They've earned some confidence from investors. If you're willing to be patient and reinvest the dividend, you could see some nice low-drama (by EV-stock standards, at least) gains over the next few years. 

John Rosevear owns Ford. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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