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Thinking Beyond EVs Will Boost Ford Motor Company Stock

James Brumley

In terms of electric cars, there’s no denying Ford Motor Company (NYSE:F) is well behind Tesla Inc (NASDAQ:TSLA), or even General Motors Company (NYSE:GM). The former mainstreamed the idea, while the latter sold more EVs in October than Tesla did that month. Ford wasn’t even close. But F Stock still is a transportation play.

Owners of F stock can take some solace in the fact, however, that while Ford may be well behind the leaders when it comes to electric vehicles, in some ways it’s out in front when it comes to transportation technology.

Case in point? Earlier this week at this year’s Consumer Electronics Show held in Las Vegas, Ford CEO Jim Hackett fleshed out the company’s plans for what it’s calling the Transportation Mobility Cloud.

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The platform takes “connected cars” outside of the vehicles themselves, and puts them all within a web of a network that can manage (and minimize) traffic all on its own.

Perhaps even without knowing exactly how the technology could be monetized, the development indicates some seriously-forward-thinking ideas from a company that had been conspicuously disinterested in such matters.

Looking Beyond Today

In simplest terms, the Transportation Mobility Cloud is the natural progression of Ford’s City of Tomorrow sandbox, a movement that thinks about what transportation should look like in the future, and then lays out plans to make it happen.

This particular solution under that umbrella envisions cities, fleet operators and self-driving vehicles to work together as a means of, among other things, staving off congested traffic.

The need for such a technology is dire. A study of New York’s traffic patterns that was released in December revealed that about one-third of the city’s ride-hailing cars on the road at any given time weren’t occupied by a rider.

Hackett said of the planned, cloud-based framework:

“We can design transportation in our cities in ways that improve the quality for everyone at the same time.” That “everyone” includes owners of cars made by competitors, and operators of autonomous car fleets that will compete with the turn-key autonomous-car fleet delivery system — its Transportation-as-a-Service system — that will be a revenue-bearing product in and of itself.


That said, it’s worth noting Ford is still looking to advance in-car technologies themselves. Specifically, F stock could get help from partnerships.

For example Ford is working with Qualcomm, Inc. (NASDAQ:QCOM) to integrate QUALCOMM’s next-generation Cellular Vehicle-to-Everything (C-V2X) chipset into some of its cars for field validations during the first half of this year.

This technology will allow a connected car to better understand exactly where it is and its surroundings, and then allow it to safely obey traffic signals, navigate near pedestrians, and so on.

Moreover, the latest versions of Qualcomm’s C-V2X chipsets will rely on 5G connectivity, which offers considerably greater data-transmission capacity than the 4G connections most wireless users enjoy today.

Of course, Qualcomm’s technology also facilitates the more basic things like wirelessly connecting passengers to digital entertainment media too.

Bottom Line for F Stock

While current and prospective owners of F stock holders may have good reason to feat that not even the company really knows where all this is going, it’s worth noting Ford is already toying with using these ideas in a revenue-bearing way.

One of these proverbial proving grounds is a developmental partnership with Domino’s Pizza, Inc. (NYSE:DPZ). The experiment, which actually began in August of last year, is exploring the ins and outs of a self-driving vehicle that delivers pizzas to a location on its own, rather than involving a driver.

The car maker is also in a similar R&D relationship with delivery outfit Postmates.

Though they’re exciting, it’s still not clear exactly how, or exactly how much, these ideas will affect F stock. Obviously autonomous cars and managed traffic are the future, but consumers (institutional or individual) are generally slow to adopt new technologies.

To that end, the recent revelations aren’t quite a reason to take on new positions in F stock.

Still, to the true long-termer that’s less worried about results here and now and more concerned about being ready for a future that’s slightly beyond the horizon, Ford is surprisingly doing more bigger-picture planning than most of its peers and rivals.

As of this writing, James Brumley held a long position in Ford. You can follow him on Twitter, at @jbrumley.

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