What happened
Shares of many growth and technology stocks have dropped significantly this week. Most investors don't think of Ford Motor (F +0.00%) as being in that category of stocks, but it is becoming more of an electric vehicle (EV) company. Ford, and EV charging stocks ChargePoint Holdings (CHPT 0.32%) and Blink Charging (BLNK +3.42%), have been dropping by double digits this week. As of early Friday morning, Ford shares were down 16.4% for the week, while ChargePoint and Blink were both lower by about 19%, according to data provided by S&P Global Market Intelligence.
NYSE: F
Key Data Points
So what
Ford didn't help its investing case this week when it reported that $1 billion in "inflation related supply costs" will hit its third-quarter results. On top of that, the company is losing some sales due to a shortage of parts caused by supply chain problems. Ford said that between 40,000 and 45,000 vehicles are sitting mostly finished, but still waiting on some parts. Those sales will now likely be realized in the fourth quarter.
NYSE: CHPT
Key Data Points
ChargePoint and Blink aren't yet profitable as they invest to grow their charging networks, and these stocks were caught up in the flight away from higher-risk growth stocks this week. But there was also some good news for the EV charging sector last week. The Biden administration announced that it had approved the plans from the majority of U.S. states for EV charging infrastructure spending using funds approved in the Bipartisan Infrastructure Law signed late last year. Spending was approved for the first $900 million of the $5 billion allocated to eventually build a national network of 500,000 EV chargers.
Now what
Ford tried to placate investors by reaffirming its estimate for 2022 adjusted earnings before interest and taxes (EBIT) of between $11.5 billion and $12.5 billion. It seems some investors aren't buying it, though. And it would be a bad time to be experiencing a drop in earnings and cash flow, as the company is investing to build an EV product lineup.
Ford seemed to acknowledge the importance of the moment with a subsequent release announcing a restructuring of its management group for the EV portion of the business. The company had previously announced that it will separate its legacy internal combustion engine business from its EV segment next year. The latter division is to be known as Ford Model e.
It added the new role of chief advanced product development and technology officer and is expanding a role for supply chain management. Ford's CFO will temporarily oversee global supply chain operations until the company names a new chief global supply chain officer. Ford CEO Jim Farley said the changes are being made "as we enter an intense period of execution for Ford Model e and our $50 billion investment in breakthrough electric and digital vehicles."
Those moves highlight the challenges Ford is facing with its transition to EVs. With the market fleeing higher-risk assets in general this week, it's not a surprise that Ford stock joined other EV names in double-digit drops for the week.
