Those looking to invest in the automobile industry should consider Ford and Tesla. These companies have a lot of potential for being green and amassing profits. So, why are Ford and Tesla attractive investments for sustainable investors?
Ford`s Sustainability
Ford is one of the most sustainable automobile brands in the industry. According to the company’s 2022 Integrated Sustainability and Financial Report (mainly showcasing information about electric vehicles), the production of electric vehicles (EVs) will increase to two million yearly by 2026.
Furthermore, electric vehicles will account for half of the company’s yearly sales volume by the end of this decade.
Ford plans to reach carbon neutrality by 2050 and significantly reduce its greenhouse gas footprint yearly. While the shift to electric cars did come with some issues, such as battery recycling and sourcing for raw materials, the transition has been worth it in the long run.
Not only does shifting to electric cars help reduce the company’s carbon footprint, but it also allows for the employment of more efficient and advanced factories, leading to more job openings and a better sustainable supply chain.
Ford`s Partnerships
Ford aligned with several international communities after the Paris Agreement to combat global warming and reduce its carbon footprint. The company also worked with RouteZero to help attain zero emissions worldwide by 2040.
Following their track record of sustainability, Ford made a joint investment with SK Innovation worth $11.4 billion into BlueOval City and three battery plants to help create a clean manufacturing system.
They are also working with Redwood Materials to help make electric cars greener and more affordable. The brand plans to do this by developing ways to recycle scrap and dead batteries and discovering ways to recycle lithium-ion batteries.
Lastly, Ford plans to open Ion Park, a battery center that can develop, build and test battery cells while simultaneously working on solid-state batteries.
These are just a few measures Ford has taken to reduce its environmental impact. All these actions show investors that Ford respects the environment and wants to develop a company that embodies climate control and environmental protection.
Ford`s Financial Performance
Ford did not perform optimally in the last fiscal year of 2022, with cash equivalents, finance receivables, and total liabilities and equity all following a downward trend. However, this setback is temporary, and things are looking up for the company.
In order to stay relevant and keep up with its competitors, Ford has taken measures to advance its products and the manufacturing process.
So far, there has been an increase in demand for Ford electric vehicles. This demand is especially high for the Ford F-150 Lightning and will likely remain high in the foreseeable future.
However, automotive industry professionals believe that there may be excess production of these cars due to lesser chip production stress and few supply chain shortages. This excess production may reduce Ford’s stock price and the demand for electric vehicles.
It is also important to remember that EVs are only a small fraction of what Ford produces, and gas-powered cars are still their more profitable profits because most drivers do not find EVs practical due to a lack of charging sources. Therefore, this could also lead to reduced demand until consumers find a way to charge their EVs.
Sadly, federal and state governments still need to devise means of implementing infrastructures to charge these cars. Regardless, the adoption rate of EVs is on the rise, and with time, Ford’s stock prices will be on the rise as well.
Granted, the prices have been continuously declining since the past year, but with innovative technology and quicker adoption of electric vehicles, stock prices are bound to rise.
Hence, it is a good idea for sustainable investors to consider investing in Ford; all that is needed is a little patience in the short term.
Tesla`s Sustainability
Tesla is an automotive brand well known for its sustainability. The company was founded in 2003 and has done nothing but produce green transportation.
Tesla doesn’t only manufacture electric cars, but the company also manufactures solar panels and roofs, and batteries. Here are some ways Tesla is leading the world into a more sustainable place.
Gigafactory
Tesla is working on Gigafactory in Nevada, which is a factory that will be powered by renewable energy. The building will have wind farms and solar panels. Once this factory is completed, it will reduce the Powerwall battery’s price, making it more accessible to consumers, thereby hastening Tesla’s mission of driving the world toward renewable energy.
Pushing Products
Tesla produces a range of products, from Tesla electric cars to superchargers. Although aesthetically pleasing, Tesla cars are not being adopted by consumers.
This is why Tesla decided to sell their products to customers directly and offer them free home services.
Furthermore, Tesla has several charging stations to enable customers to charge their electric cars free of charge for 30 minutes. The company took this step to ensure the adoption rate of their EVs increases significantly, and it is working.
Finally, Tesla typically creates products from recyclable materials. For example, when the Tesla Powerwall reaches its end, its parts are used to develop new products. This is a perfect example of Tesla pushing the sustainable agenda.
Collaborations
Over the years, Tesla has collaborated with numerous bodies to ensure that the global sustainability rate increases steadily.
To further drive this point home, the founder of Tesla, Elon Musk, announced that Tesla would not take legal actions against businesses or individuals who decide to use Tesla technology to increase the implementation of sustainable transport.
In addition, Tesla has worked with Solar city (a company that produces solar panels) to create a solar roof that looks like a typical roofing tile but contains solar cells. This is another way Tesla has tried to make the world adopt a greener and more stylish lifestyle.
Tesla`s Financial Performance
Despite its less-than-optimal financial history, Tesla is presently doing well. In fact, Tesla reported over $5.5 billion as income for the first half of 2022, surpassing the net income of the whole year 2021. The increase in revenue has to do with the fact that the company was able to increase production and push out the Tesla Model 3, a best seller.
After two solid years (2021 and 2022), it is safe to say that Tesla’s financial health has improved significantly. With their best sellers and ever-changing technology, this improvement can only go up.
It is worth noting that Tesla is one of the forerunners in the EV space, but recent competition might cause the gap to reduce. Regardless, Tesla is financially stable, and investing in the company is a great idea.
Why Ford and Tesla are Attractive Investments for Sustainable Investors
Ford and Tesla have spent time, money, and effort to ensure the world becomes green. Additionally, they have taken extraordinary measures to ensure that their financial health is above average, meaning they are profitable, thereby providing safe investments with high returns.
From their dedication to sustainability and stable financial health, Ford and Tesla are the perfect investment opportunities for individuals looking to transition the world to a more environmentally-friendly ecosystem and earn money.
Conclusion
Ford and Tesla are both dominant automotive companies that have been in the game of producing top-notch vehicles for decades.
Tesla has always had a hand in sustainable products, and while Ford was late to the game, both companies have made a name for themselves. Also, it doesn`t hurt that they are extremely profitable.
Ultimately, these are some reasons why investing in these companies is a smart move for sustainable investors.
