Ford Motor Company (NYSE: F) shares edged lower to $14.95 in late trading Tuesday, as investors weighed the automaker's recent energy-storage rally against a new competitive move from General Motors (NYSE: GM) and weak May sales data. The stock, which had surged roughly 35% since early May on optimism around Ford Energy's battery storage business, now faces questions about when those gains will translate into profits.
GM's Sodium-Ion Battery Play
General Motors announced Tuesday a partnership with U.S. startup Peak Energy to develop sodium-ion batteries, targeting large-scale storage for data centers and utilities. The technology uses no lithium, potentially reducing costs and supply chain risks. GM shares traded nearly flat at $83.76, as the market assessed the implications for the broader EV and storage landscape.
Ford's Energy Storage Ambitions
Ford's own energy storage unit, Ford Energy, has been a key driver of the stock's recent rally. The company struck a five-year deal with EDF Power Solutions North America, allowing EDF to purchase up to 4 gigawatt hours (GWh) annually, totaling 20 GWh. However, first deliveries are not expected until 2028, leaving a gap between promise and performance. "We are not simply delivering hardware," said Lisa Drake, president of Ford Energy, emphasizing the company's manufacturing discipline.
CEO Jim Farley told shareholders last month of "tremendous interest from customers" and that Ford is in the contracting phase with early adopters, according to the Financial Times. Yet the stock still struggles to price in that future revenue stream.
May Sales Slump
Ford's May U.S. sales figures painted a stark picture. Total sales dropped 13.6% year-over-year, with EV sales plunging 43.9%, hybrids down 15.7%, and F-Series pickup sales falling 13.3%. Only the Maverick pickup posted a gain, rising 10.0%. The data underscores ongoing challenges in Ford's core automotive business.
Regulatory Edge and Analyst Views
Morgan Stanley analyst Andrew Percoco maintained a Hold rating and $17 price target on Ford, citing an "underappreciated competitive advantage" from Foreign Entity of Concern (FEOC) rules. These U.S. regulations limit supply chains tied to certain foreign entities, potentially benefiting Ford's battery sourcing strategy. Percoco told Barron's that this regulatory positioning could give Ford an edge.
Market Context and Outlook
The broader market had a mixed session Tuesday. The Dow Jones Industrial Average eked out a 0.17% gain, while the S&P 500 fell 0.26% and the Nasdaq slid 0.97% amid tech weakness. "The tape came for sale more broadly," said Michael O'Rourke, chief market strategist at JonesTrading.
Ford's energy storage narrative remains a long-term bet, but near-term headwinds persist. The EDF deal won't contribute to earnings for years, and the tax-credit advantage hinges on current regulations holding. If sales momentum in EVs and pickups continues to weaken, or if the customer pipeline slows, Ford's stock could revert to trading like a traditional automaker rather than a power infrastructure play.
For now, investors are watching GM's move into sodium-ion batteries and Ford's ability to convert its contracting activity into tangible results. Tuesday's late trading showed little conviction, leaving the stock's next move tied to execution on contracts and margins.
