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Ford Motor Company (F 1. 70%) has a lot on its plate right now. It is doubling down on quality to offset premium warranty prices that have squeezed its profits, figuring out a solution to its sales spiral in China and navigating a complicated electric vehicle. (VE) market.
At least one thing Ford doesn’t have to worry about is its sales, which are still going strong. Below, I’ll scratch the surface of the company’s fourth-quarter sales results and dig more deeply for some intriguing insights.
Ford ended 2024 on a strong note and gaining some market share, helped by a 9% increase in fourth-quarter U.S. sales, more than double its full-year sales gain of only 4%. Ford’s full-year sales topped 2.01 million vehicles, which was its best mark since 2019. The result was driven by a booming electric-vehicle lineup, as well as its Explorer and F-Series. The latter remained the nation’s best-selling pickup line for the 48th consecutive year.
One of the most productive parts of Ford that everyone turns to is Ford Pro, the company’s business division. In the first nine months of 2024, Ford Pro generated $7. 4 billion in earnings before interest and taxes (EBIT), which compares very favorably to Ford Blue, the company’s classic business, which generated only $3. 7 billion in EBIT.
Ford Pro is a vital component of the automaker’s investment thesis and posted a strong result in the fourth quarter, with Super Duty truck sales up 30% year over year. For the full year, Super Duty sales increased just 14%. So it’s a strong quarter and will influence Ford Pro’s effects accordingly.
Further, Ford’s full-size vans accounted for roughly half of that segment’s sales in 2024, which marks the company’s 46th year as a leader in the commercial van segment. Ford Pro Intelligence software, which helps businesses monitor their fleets and get insights for their operations, had nearly 650,000 active subscriptions, a 27% gain, compared to the prior year.
Led by Super Duty trucks, full-size vans, and subscription revenue, Ford Pro can help drive Ford’s earnings higher during the fourth quarter.
A common narrative surrounding the EV industry is that it’s not growing — but that’s false. The EV market is indeed growing, just at a slower pace than investors and automakers had planned. That said, Ford bucked the trend, and its electric vehicles posted strong gains during the fourth quarter.
Ford’s electric vehicles, which includes full-electric vehicles, hybrids and plug-in hybrids, were up 38% in 2024, topping competitors General Motors and Stellantis. That strong result was partly driven by Ford’s Power Promise, a program that includes a home charger with standard installation at no extra charge.
Looking at only full-electric vehicles, Ford hit a best-ever EV sales record, with 30,176 vehicles sold. One vehicle leading the charge was Ford’s Mustang Mach-E, which posted its best-ever quarterly sales result and placed second behind Tesla’s Model Y for full-year electric SUV sales. But it was Ford’s hybrids that stole the show, which was perhaps surprising to some investors. Ford sold 187,426 hybrid vehicles for the full year, up 40%, compared to 2023.
Even if increasing sales is smart in the long term, Ford expects to lose about $5 billion on its Model-e division in 2024. The pain will only increase through 2025, to some extent. Investors will be watching to see whether the company can reduce its large losses this year.
Maybe one of the few aspects of Ford that’s overlooked is its luxury Lincoln lineup. Consider it the cherry on top, as Lincoln sales were 10% of the volume of its truck-segment sales during the fourth quarter. However, luxury vehicles cost only marginally more than standard vehicles to produce and generate much higher price tags, making their margins a welcome addition to the sales mix.
In that sense, Lincoln’s sales increased by 35% in the fourth quarter and by 28% in the year. This was Lincoln’s most productive retail sales result since 2007 and was driven by the all-new Nautilus and Aviator.
While it would be attractive for Ford to have a strong luxury product lineup that would increase strength margins, it would be sensible for investors to temper their expectations despite strong fourth-quarter results. This is simply because European luxury cars are more complex. and they have a strong presence in the United States, while protecting their territory from competitors such as Lincoln.
Ford has a number of issues to address, such as quality, which would help reduce the number of recalls and offset higher warranty costs. Ford has been an industry leader in this area for three consecutive years. It will have to solve its problems in China, increasingly full of electric cars and governed by domestic manufacturers.
The good news is that Ford reported strong sales results in the fourth quarter. Whatever problems the company has that can be fixed, it provides vehicles that other people want to buy, and that’s for any investment thesis.
Daniel Miller holds positions at Ford Motor Company and General Motors. The Motley Fool holds positions at Tesla and recommends it. The Motley Fool recommends General Motors and Stellantis and recommends the following options: $25 buy in January 2025 at General Motors. The Motley Fool has a disclosure policy.
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