Ford Motor CEO Jim Farley told investors on Thursday to forget about Tesla and touted the company's "Pro" fleet business as the future of the automotive industry.
At a Wolfe Research conference, Farley said: "If you're looking for the future of the automotive industry, stop looking at FSD [Full Self-Driving systems] and Tesla. Look at Ford Pro. It's got half a million subscribers with 50% gross margin," CNBC reported.
As he highlighted Ford Pro's substantial growth, Farley likened it to Deere & Co.'s stock trajectory seven years ago, which saw a notable increase.
The Ford Pro
The Ford Pro unit encompasses various business aspects, including traditional fleet and commercial operations, alongside emerging services like telematics and logistics for corporate clients.
Jim Farley underscored the unit's profitability, citing a significant rise in pretax earnings to $7.2 billion last year, with expectations of further growth to $8 billion to $9 billion in the current year.
While Ford Pro's revenue projections show a robust outlook, Farley reiterated the underappreciated value of this segment within Ford. Morgan Stanley's Adam Jonas echoed this sentiment, likening Ford Pro to Ferrari, and emphasized its potential for growth and profitability.
Skepticism Persists on Ford Motor CEO's Assertions
However, some skepticism persists among investors regarding Jim Farley's assertions, especially considering Ford's delayed investments in electric vehicles (EVs) amid slower-than-expected adoption rates and significant losses in its EV business segment, according to CNBC.
Despite this, Farley remains optimistic about Ford Pro's prospects, highlighting the rapid adoption of all-electric vehicles among fleet customers. Farley's emphasis on Ford Pro aligns with the company's broader restructuring and growth strategy, known as "Ford+."
Led by its CEO Ted Cannis, Ford Pro is pivotal in the company's efforts to capitalize on emerging opportunities in the fleet and commercial vehicle market.
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