While Tesla remains the frontrunner in the electric vehicle (EV) space, and may have the production lined up to continue flourishing as the market explodes, traditional automakers like Ford Motor Company (NYSE:F) aren't just idling, either. Long considered a slowly declining legacy automaker, Ford appears to be shifting into high gear as it makes its grand entrance on the EV scene. Here are three reasons it may be making the right moves now for future growth.

1. The company is going all-in on EV production

There's nothing halfhearted in Ford's EV plans, with the company committing strongly to its electrification strategy. It is investing $7 billion, an amount it claims is the biggest single outlay ever by a U.S. automaker in electric vehicle production, in a series of massive factories to launch its EV bid. In doing so, it's partnering with South Korean battery manufacturer SK Innovation, which is adding $4.4 billion to the factory investment, raising it to $11.4 billion, and bringing its expertise to the alliance too.

An aerial view of cars and trucks parked after manufacture, awaiting shipment.


The biggest location, Blue Oval City, will cover six square miles in Tennessee. This enormous factory complex will contain facilities for constructing both vehicles and batteries. The investment will also pay for a second Tennessee factory focused on battery manufacture, and two additional battery factories in Kentucky. The battery locations will be able to make 129 gigawatt hours of batteries between them every year, once operational. The new manufacturing sites will join several other, smaller EV facilities already in existence, while Ford intends to invest a total of over $30 billion in electric vehicle fabrication by 2030.

2. It has a varied EV lineup and a flexible product mix planned

Appealing to different consumer needs and demographics, Ford is starting out with three EVs for 2022. These include the F-150 Lightning pickup truck, the Mustang E-Mach (said to be capable of accelerating to full speed in a literal split second, or half a second), and the E-Transit cargo van. More models will undoubtedly follow, including various sedans, possibly larger all-electric pickups, and SUVs. With its large production capacity, Ford won't need to focus on just one or two models, like start-up Fisker with its Ocean SUV and "Project Pear" (personal electric automotive revolution) as its only two currently planned models. A broader array of models will help Ford capture more market share quickly.

In the press release regarding its Blue Oval City and battery factory plans, Ford also notes it "expects 40% to 50% of its global vehicle volume to be fully electric by 2030." Over the next decade, its strategy will theoretically leave it with sales that are half EVs and half ICE (internal combustion engine) vehicles. Looking for an even split between the two engine categories appears likely to give Ford flexibility in adjusting to future market conditions, able to switch production readily one way or the other to match developments.

3. Its F-150 Lightning is plugged into two major trends

Ford's fully electric F-150 Lightning pickup truck combines two high-demand vehicle types, EVs and pickup trucks, in a single package with potentially wide-spectrum appeal. Ford is currently only accepting reservations, but according to a leaked dealership screenshot shown by The Drive, it might launch direct ordering of the Lightning on Oct. 26. Regardless of the exact date ordering starts, Ford's September sales figures confirmed Lightning reservations topped 150,000.

The same monthly report shows robust EV demand, with its "electrified vehicles" sales jumping 91.6% year over year to 9,150. Customers continue showing interest in pickup trucks, too, with F-series retail purchases in September 2021 surging 36.5% year over year and increasing 13.4% from August.

This matches research data about American automotive purchase trends. The Federal Reserve Bank of St. Louis' economic research shows light trucks selling in steadily mounting numbers since 2009. Sales reached an all-time peak in April 2021 before semiconductor chip-related vehicle shortages reduced them. The trend will probably rebound strongly once chip supply increases, just as it did after the initial March 2020 COVID-19 downturn, and the F-150 Lightning is positioned to capture sales from both EV and pickup truck demand when it does.

Is Ford a good EV investment?

Energetic upstarts like Tesla and Fisker naturally take first place in news cycles with their bold EV market moves. But Ford, a veteran among automotive stocks, is moving forward strongly with its own EV strategy. This involves significant investment, which could affect its results, perhaps prompting traders with a short-term view to bid it down.

However, its electric developments appear solid, and are timely for the current pivot toward electric cars. Its strategy has risks but will likely pay off long term. While it may not see its share prices return to the heady days of the early 1990s, its stock is very affordable at the moment and may have lots of upside with its mixed ICE and EV strategy to sell to both sides of the market. The sheer scale of its operations, the depth of its pockets, and the vigor of its strategic planning appear very timely for putting it in the first rank of electric car stocks long term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.