In early December, automotive giant Ford Motor Company (F -0.30%) stopped taking reservations for its upcoming F-150 Lightning pickup truck after reaching 200,000, CEO James Farley revealed in a Dec. 7 talk with CNBC host Jim Cramer. Farley also discussed the Blue Oval's plans for its Rivian Automotive (RIVN -4.06%) stake and detailed further electrification plans.
Meanwhile, Ford is backing a solid-state electric vehicle (EV) battery maker's SPAC merger public debut. Together, these news items arguably paint a picture of a dynamic, energized Ford and a probably bullish future for investors.
Latest developments for the Ford F-150 Lightning
Putting another feather in its cap on its way to an electrified future, Ford got its 200,000th F-150 Lightning pickup and stopped taking any more reservations before the electric truck's likely summer 2022 arrival in showrooms. Describing why the company deemed the halt necessary, CEO James Farley said "we are completely oversubscribed with our battery electric vehicles, Lightning especially," on the CNBC Investing Club show.
Image source: Ford Motor Company.
The electric version of Ford's workhorse F-series pickup generated strong interest from the beginning, with 20,000 reservations made in the first day and 160,000 achieved by early November. The last 40,000 reservations were made in less than a month.
Farley noted the truck's popularity outstripped current manufacturing capacity of 70,000 to 80,000 vehicles. He also confidently stated the Blue Oval is "going to try to double that," noting "don't bet against Ford when we have to increase capacity."
Demand for Ford's electric pickup truck clearly isn't lacking, with Farley describing the reservations, which require putting $100 down, as "hard orders." Approximately 40% of customers making reservations said they would trade in an internal combustion engine (ICE) vehicle as part of their Lightning purchase, too, at least as of Nov. 1. While manufacture could be a bottleneck, Ford is taking steps to address this as well.
Ford's Rivian position and the race to expand manufacturing
One significant asset at Ford's disposal is its 12% stake in EV company Rivian. Originally planned as a partner in manufacturing Ford's electric vehicles, the Blue Oval's plans rapidly advanced past the point where it needed the help of a EV start-up to get its electrified lineup into production. Ford bought 102 million shares of Rivian in a series of purchases, spending $820 million in the process.
Rivian's share value soared since then, pushing the worth of Ford's stake to approximately $12.5 billion as of the second week in December. Back in November, I suggested Ford could cash in on its bullish investment and gain billions in funding for operations without needing to add to its debt. During his Cramer interview, CEO Farley revealed Ford is indeed considering selling some of its Rivian stock strategically, though it is still "too early to tell what we are going to do."
Farley said returning cash to investors is a priority, but Ford might also sell off part of its position to get money for acquisitions. More EV manufacturing capacity, and battery-making companies in particular, probably are at the top of the list for acquisitions it's looking out for. Its Rivian stake, in short, is effectively "money in the bank" for Ford, a source of capital it can tap as needed as it maneuvers to expand its EV factories enough to meet the kind of red-hot demand leading to the Lightning reservation halt.
The Blue Oval's interest in a solid-state battery SPAC
With Ford's EV sales already booming and an overwhelming numbers of reservations for them, Ford isn't stopping with its $11.5 billion plan to build multiple huge battery factories in the U.S., including a Tennessee facility dubbed Blue Oval City, by 2025. It's also one of the major backers, along with General Motors (GM -0.07%), of newly launched solid-state battery maker Solid Power (SLDP 10.77%).
Solid Power went public on Dec. 9 in a merger with SPAC Decarbonization Plus Acquisition Corp III. Its shares went on a roller coaster of gains and dips the same day, sometimes peaking as high as 14% above its initial price and up 3% at market close. Ford invested in Solid Power back in May and has a contract with the company for joint R&D to make EV-capable solid-state electric batteries.
Solid Power says its development partnership with Ford is "extensive" while claiming its solid-state batteries are "safer, offer higher energy, and cost less than lithium-ion." Solid-state batteries are said to be far less prone to explode or burn even if damaged in an accident. However, a Just Auto survey of the EV industry shows about 42% of companies don't expect viable batteries of this type to start featuring in EVs before 2026.
Image source: Ford Motor Company.
Regardless, Ford is clearly taking steps to gain a foothold in this potentially important technological improvement to electric vehicles, once again showing its determination to keep the initiative and not lag the general EV market. In fact, during the Cramer interview, James Farley also mentioned the Blue Oval's intention to overtake Tesla (TSLA -4.76%), an ambitious goal but one potentially supported by its recent achievement of 10% EV market share in the U.S.
Combined with its huge electrification program, billions in opportunistic funding from sales of its Rivian shares, and customer enthusiasm for the F-150 Lightning, Ford seems to continue to be in high gear as one of the strongest emerging electric car stocks and a possibly viable future challenger to Elon Musk's Tesla.
