Ford's underrated "Ferrari".
Written by TrumanEdited by Qin Zhangyong"Don't just focus on autonomous driving. ”
Just when companies are betting their money and future on autonomous driving, Ford is openly singing the opposite.
Jim Farley, the company's CEO, called out Wall Street investors and analysts to forget about Tesla and FSD, becauseFord's Ford Pro fleet business is the future of the automotive industry
In Jim Farley's view, Wall Street is focusing too much on driver assistance and neglecting the business that is really profitable.
What is the concept that Ford Pro's pre-tax profit soared about double to $7.2 billion last year?
Ford's adjusted EBIT for the full 2023 was 104$200 million, Ford Pro alone contributed two-thirds, compared to Ford's Model E electric vehicle business, which lost a total of $4.7 billion in 2023!
It is clear which is more important at a glance.
Tesla bulls: the underrated "Ferrari".
The Ford Pro is comprised of Ford's traditional fleet and commercial businesses, as well as its emerging telematics, logistics and other related businesses for large corporate customers, as well as parts and services for businesses.
Jim Farley says if you're looking for the future of the automotive industryStop staring at FSD and Tesla"Let's take a look at Ford Pro, we have a 50% gross margin. In his opinion, the Ford Pro is grossly underrated internally.
Although Jim Farley is suspected of boasting by saying this, there are still analysts on Wall Street who agree with Farley's statement.
Among them is the well-known Tesla bull, Morgan Stanley analyst Adam Jonas, who compared the Ford ProFord's "Ferrari".
Jonas mentioned that when Ferrari was still in Fiat Chrysler, he gave a valuation of $4 billion, and now Ferrari is worth $80 billion. When Ferrari was not spun off from Fiat, it was completely ignored and seriously undervalued by investors.
Now Ford also has a Ferrari, which is called Ford Pro. I think we should agree that people are ignoring a cash cow. ”
He believes that this business is due toProfits are siphoned off, which was mainly used to fill Ford's "electric car project" and was overlooked.
Ford currently has three customer-focused automotive segments: Ford Blue (conventional combustion engine vehicles), Ford Model E (electric vehicles) and Ford Pro (Ford commercial vehicles and related services and solutions).
Among them, Ford Blue is the backbone of Ford, the Ford Model E is Ford's transformation project in the field of electrification, and the Ford Pro is Ford's new energy commercial vehicle division established in 2021 to provide vehicle services and distribution business.
The business is specializedAimed at commercial vehicles and corporate key customersBy fully leveraging vehicle-to-cloud intelligent connectivity technology to provide one-stop services, it can improve the vehicle operation performance of commercial fleets, improve work and production efficiency, and simplify the operation process, thereby reducing vehicle costs.
Specifically, Ford Pro provides services in the following areas:
Ford Pro modelThe range includes commercial vehicles, including electric and internal combustion engines, from Ford's gasoline-powered and hybrid vehicles to fully electrified vans and commercial full-size pickups.
Ford Pro charging, for a series of software and hardware solutions such as public charging piles, commercial fleet parking lot charging piles and home charging piles.
According to Ford's official introduction, they provide end-to-end charging solutions, whether you are buying your first commercial electric vehicle or adding vehicles to your fleet, you can get help with chargers, software and infrastructure services, which means that no matter the size of the enterprise, you can find a suitable and scalable all-in-one solution.
In addition, there is charging software that manages the state of the vehicle while it is charging, such as avoiding peak charging times, reducing energy rates, monitoring and managing the charging operations of the entire fleet from a single account, and providing dedicated customer support.
Ford Pro is intelligentBusiness, on the other hand, is a digital service for operating vehicles to help enterprise customers manage and operate their fleets. Moreover, regardless of whether the operating vehicle is a Ford brand, or an electric vehicle or a fuel vehicle, the relevant intelligent software can be used.
Ford's commercial vehicles, each equipped with a standard embedded modem, have access to Ford Pro intelligent software, and stay on top of important issues such as maintenance and energy use, while potentially reducing costs.
Ford Pro Elite Service, with a dedicated large-scale logistics service station, which can further expand Ford's commercial vehicle service network. By 2025, Ford expects to launch 1,200 mobile service vehicles across the U.S. to meet customer demand.
In addition, Ford also provides financial services intimatelyford pro fin***, including commercial lines of credit, vehicle leasing and procurement, charging infrastructure, and professional needs.
In a word, the Ford Pro has penetrated all areas of commercial vehicles. Jim Farley also has high hopes for the Ford Pro, believing that the business will help Ford redefine the commercial vehicle and service segment.
Can it be an alternative to FSD?
FSD has always been Tesla's biggest selling point and reliance, and Tesla has been committed to improving the performance and reliability of FSD technology.
At the same time, FSD is also a major revenue for Tesla**. As we all know, Tesla's FSD is a paid subscription, and the current pricing of FSD's domestic official website is 640,000 yuan, the ** in North America1.$50,000(About RMB 10.)50,000 yuan), and the monthly subscription** is $199 to $99 per month.
If you calculate according to this **, Tesla has made a lot of money by selling software, but Tesla has not announced FSD's revenue and profit.
Most Wall Street Analysts**, by 2030,FSDs generate tens of billions of dollars in revenue each year。Musk has bluntly said, "In the long run, the revenue from self-driving will make all these numbers (traditional car sales profits) look stupid." ”
The importance of FSD to Tesla is self-evident, and the CEO of Ford believes that the same is true for Ford Pro.
According to Jim Farley, the Ford Pro had 500,000 subscribers last year, up 46% year-over-yearGross margin was 50%.
According to Ford's 2023 financial report, full-year revenue totaled $176.2 billion, an increase of 11% year-on-year; Net profit was 43$300 million, with an adjusted EBIT of 104$200 million.
Among them, the performance of the Ford Pro business was particularly outstanding, with earnings more than doubling from the previous year to $7.2 billion, and the profit margin rose to 124%。Ford Motor CFO John Lawler said the Ford Pro has ". .We're just realizing the huge potential
Ford expects that in the coming years Ford Pro's revenue from telematics and other non-traditional subscription services, will increase to:$2000 per car per year, which is about $167 per month. By 2026, it is expected that 20% of Ford Pro's total revenue will come from it.
In terms of profitability, Tesla's FSD and Ford Pro are both good hands. However, compared with the autonomous driving services provided by FSD, Ford Pro obviously serves more fields and is more imaginative.
This is because Ford Pro can not only generate revenue from providing customized gasoline, hybrid and electric model combinations and value-added services to commercial customers, but also monetize through paid software subscriptions, value-added service subscriptions, and mobile repair orders for commercial customers.
Previously, Ford officially predicted that by 2025,Ford Pro services will generate $45 billion in revenue, and the car itself may not be the main selling point, and half of the business revenue will come from car services and software.
This is also an inevitable trend, and car companies have begun to rely more and more on software to make money, no longer limited to selling cars.
Electrification is still losing money
Bet on the Ford Pro and the Ford Model E business will inevitably be unpopular.
The fourth quarter and full year 2023 financial results show that the loss of Ford Model E business continues to increaseThe electric vehicle business lost 15$700 million, higher than analysts' expectations of 13$400 million, up from $6.0 million in the same period in 2022The $3.1 billion direct more than doubled.
For the whole of 2023, Ford's electric vehicle business has lost a total of $4.7 billion, up from a previous forecast of $4.5 billion.
Like other traditional giants, Ford is using the company's power to engage in electric vehicles, and the money invested is naturally in the two profitable business segments of Ford Blue and Ford Pro.
However, building an electric car is like losing money and making money, which is more obvious than in traditional manufacturers like Ford. It's just that now the new energy transformation is on the way, and Ford can only continue to invest.
Earlier this month, Ford said its electric vehicle business would continue to lose money this yearThe loss is expected to be between $5 billion and $5.5 billionAround. However, Ford is also very optimistic, with CFO John Lawler saying that even if electric vehicles are not yet profitable, the company is still benefiting from them.
Jim Farley said that while consumer demand for EVs was lower than expected, fleet customers were actually adopting all-EVs faster than the company expected.
It's easy to say, but in fact Ford is still rethinking its electric vehicle strategy.
It is reported that Ford is also developing a smaller, lower-cost electric vehicle platform that can be used on a range of vehicles, and as for the next generation of electric vehicles, Ford promises that it can be within a year of starting salesBe profitable
At the same time, Ford has also postponed a second joint venture battery plant in Kentucky, downsized a new lithium iron phosphate plant in Michigan, and has not continued to build a joint venture battery plant in Turkey.
After deciding to postpone $12 billion in EV spending, Ford expects this year'sSales of hybrid models are expected to increase by 40 percent
Consumers will decide on production, and the next generation of EV models will be launched after the return on capital is appropriate. ”
In other words, in the face of electric vehicles that continue to lose money, Ford has also seen the reality clearly, and the process of electrification is no longer radical.
After all, for a business, as long as it can make money, it is a good business.