Only a few years ago, much of the automotive industry including Ford Motor Company (NYSE: F) made a sizable gamble that the U.S. consumer would largely skip the hybrid option as the world transitioned from gasoline-powered vehicles to full electric vehicles (EVs).
That proved costly and through changes in strategy, cancellation or delays of vehicles, and other special charges, it cost the broader industry tens of billions of dollars
Despite that rather large speed bump, there are a couple of positive developments for full-line automakers such as Ford and not-so-great news for fully EV-focused companies such as Rivian Automotive (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID). Trends are becoming more clear A few years ago automakers expected a rapid increase in EV sales, similar to trends seen overseas, but growth in the U.S. would prove slower to gain traction than expected and will almost certainly fall well short of the 50% market share initially expected by the end of the decade. “The key takeaway is that supply and demand are converging, and that’s what is driving sustained growth in hybrids,” according to Stephanie Valdez Streaty, director of industry insights for Cox Automotive. “More models, broader participation, and strong consumer pull driven by fuel savings without the range and charging trade-offs that still give some buyers pause.” Now gasoline-powered vehicles are expected to still account for 50% of the U.S. market by the end of 2030, a decline from 73% last year, while hybrid EVs are expected to rise 16 percentage points to 34% of the market over the same time frame, according to estimates from AlixPartners. Positive developments Knowing what we know now, Ford investors would have preferred a more balanced strategy between powertrains, but with hybrid demand coming on strong, the full-line automaker will more quickly adapt unlike younger EV makers such as Rivian and Lucid waiting for full EV demand to gain traction in the coming years.
Ford is…