MF: Buy $F, Avoid $RIDE

Motley Fool Headline: 1 Electric Vehicle Stock to Buy Hand Over Fist and 1 With Serious Red Flags

By Rekha Khandelwal - Jun 6, 2022 at 8:53AM

To buy: Ford

Though Ford (F -0.56%) isn’t the first name that comes to mind when talking about EVs, the company is laser-focused on boosting its EV business growth. Ford’s target is for half of its global sales volume to be all-electric by 2030. To achieve this goal, the company plans to invest $50 billion in EVs by 2026. Ford’s battery electric sales rose 222% in May over last year. The company has started deliveries of its much-awaited electric pickup truck, the F-150 Lightning.

Ford is taking several steps to expand its EV business. It’s looking at increased vertical integration over the medium and long term to secure its battery supply. It’s hiring the needed talent, streamlining its dealer network to make it more cost-competitive, and planning a small number of compelling, high-volume EV models.

What kind of margins Ford will generate from its EV business remains to be seen. However, at a price-to-earnings ratio of around 4.9, the stock is trading at an attractive valuation compared to top traditional automakers. Indeed, compared to pure-play EV makers, Ford’s stock looks super cheap: