Transcript
A (0:00)
A new phone for Billy, a necklace for Sam, all the while on the lookout for scams. A swipe here and tap there. Better make it go far. Turns out mom didn't know she needs a new car this year.
B (0:11)
Stay on top of your credit with the MyFico app. Get your FICO score straight from the people that created it. Plus free credit monitoring and a free credit report every month. No credit card required. So make holiday spending one less stress under the mistletoe. Visit myfico.com free or download the MyFico app today.
C (0:30)
This is Scott Becker with the Becker Business. In the Becker Private Equity podcast we try and bring you one to two business or market insight episodes a day, plus typically an interview with a great business leader. Today's discussion and we'll have a couple episodes coming out tomorrow. One on Elon Musk becoming worth about $600 billion, which is an insane number. Second interview with a incredible leader, Jeff Friedman, and then you'll probably get this episode as well tomorrow. Today's discussion is Ford's Electric Vehicle Program crashes. So here's the discussion here and the good news for Ford is their core business is performing incredibly well, much better than many people had expected. The bad news is they've announced that they're taking nearly a nineteen and a half billion dollar write down on their EV business. This is a number that's an astounding number and it sort of shocks me at how much the market has already digested this loss. Ford in total is about a $54 billion market cap company and you'd think that taking a $20 billion write down or $19.5 billion write down would be an absolute disaster. The reality is Ford's up about so far this year it is up nearly 37%. The markets have not really reacted to this news of write down, largely because they've already digested that this is where it's going and Ford has done a pretty good job of forecasting this is where that where they're going with electric vehicles. It does go to the point though that once federal subsidies went away for electric vehicles, there just wasn't the demand for electric vehicles that people expected. Now of Ford's $20 billion loss, the reality is I think only about 5 to 6 billion of that is going to be a real cash loss over the next couple years. To the geniuses in financial prognostication and financial manipulation, they've done a great job of taking this loss. While things are well, are overall going great or very well at Ford, thus not causing Ford to tank. But I do find it just literally fascinating that any company could take a nineteen and a half billion dollar loss, even if only six billion dollars of that is cash, and survive and thrive and still be in overall great shape again. It's almost the complete washout or their EV program and they're moving from EVs to hybrids and back to their core models, the Ford F150s and so forth. I find it fascinating. I mean similarly Tesla, which is the most successful of what was a pure EV maker and not a gas type of car, continues to sell a lot of electric vehicles and continues to be the leader in that. But so much of Tesla's market cap in their long term strength is based on robotics and other types of products like driverless taxis and so forth. A whole different issue that we won't discuss today is the impact of so many people that earn their living through driving or part time earned a living through driving and the potential impact that all the way goes and the driverless taxis are going to have on that business as Uber, Lyft and everybody else over time moves to driverless vehicles. Absolutely fascinating. A little scary fasting on Ford taking literally a nineteen half billion dollar write off. More fascinating that it's not killing their stock price and they're doing okay. Thank you for listening to the Becker Business and the Becker Private Equity Podcast. Please feel free at any time to text Scott Becker at 773-766-5322. And if you're the first person to text me based on this episode Ford crashes, then I'd be thrilled to send you a gift card for $50 from Amazon. But you got to be the first listener. Thank you for listening to the Becker Business and the Becker Private Equity Podcast.