Ford shares jump 6% as Morgan Stanley hails CATL-backed energy business – Yahoo Finance
Investing.com — Ford Motor (NYSE:F) shares rose 6% on Wednesday following positive analyst commentary on the company’s energy storage business and its potential to improve profitability within the Model e electric vehicle segment.
The gains came after Morgan Stanley analyst Andrew S Percoco highlighted Ford Energy as an underappreciated competitive advantage. The analyst noted that Ford’s licensing agreement with CATL positions the company as one of few semi-vertically integrated domestic energy storage system suppliers in the United States.
“We believe Ford’s relationship with CATL is an underappreciated strategic competitive advantage for its Energy Storage business,” Percoco commented. “Through this relationship, Ford becomes a key supplier of compliant ESS systems to utility and data center customers in the US.”
The analyst explained that Ford’s access to CATL’s lithium iron phosphate technology puts the company in a unique position to meet Foreign Entity of Concern compliance requirements, which are necessary for customers to qualify for the 30% Investment Tax Credit on energy storage projects.
Morgan Stanley estimates Ford Energy could generate $500 million to $600 million of run-rate EBIT at 20 gigawatt hours of production capacity. Percoco said the firm believes Ford will likely announce energy storage supply agreements with large commercial customers and hyperscalers over the next few months.
Ford announced its $2 billion investment into the energy storage business late last year. The move was met with skepticism as it coincided with a $20 billion write-down in the company’s electric vehicle business.
Ford shares are down 2.75% year-to-date.
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