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Walk around of the Ford Police Responder Hybrid with Arie Groeneveld, police program chief.
NEW YORK — Ford reiterated its commitment to invest $4.5 billion to launch 13 hybrid or electric vehicles over the next five years, saying it believes demand for such vehicles will continue to increase globally one week after upstart electric automaker Tesla passed Ford in value on Wall Street.
Tesla, which sold just 76,230 vehicles globally last year, became America’s most valuable automaker on Monday when it passed General Motors in terms of market capitalization —one week after it passed Ford. Market capitalization is the value of all outstanding shares of a publicly traded company multiplied by the trading price of the stock.
On Monday, Tesla ended the day with the value of all of its common stock at $51.5 billion compared with $50.2 billion for GM and $44.6 billion for Ford.
Much Tesla’s perceived value is the potential growth the automaker could achieve in the future as it launches more electric cars.
But on Monday, Ford unveiled the Ford Police Responder Hybrid. It is the eighth hybrid or electric vehicle out of the 13 Ford has planned in the coming years.
Ford, which sold 6.6 million vehicles globally in 2016, launched its first hybrid car in 2008.
“We’ve been a leader for quite some time. We’ve sold 550,000 electrified vehicles since we launched the original Ford Escape hybrid in 2008,” Joe Hinrichs, Ford’s president of the Americas said. “We have a lot of experience with it, a lot of patents, a lot of technology.”
GM expects to earn more than $9 billion this year and analysts predict Ford will generate adjusted profit of about $6.3 billion. On that basis, Tesla is expected to lose more than $950 million.
But Tesla isn’t encumbered by big SUVs or gasoline powered cars. Founded by Elon Musk, investors see the electric carmaker as a company that is shaking up the traditional auto industry.
Hinrichs said Ford can’t obsess over what investors think.
“At the end of the day, we run the business to serve our customers,” Hinrichs said when asked if Wall Street is undervaluing Ford’s electric vehicle business.
He also declined to say if Ford is a more valuable company than Tesla.
“Cash flow should determine what the value of a company is and our cash flow has been pretty good lately,” Hinrichs said.
Last year Ford’s automotive segment generated $6.4 billion in cash. Tesla consumes more cash than it generates. In 2016, Tesla’s negative cash flow was $123 million.
Musk has defended Tesla’s cash flow issues, saying it is still a start-up compared with traditional automakers and is investing heavily in its future.
Contact Brent Snavely: 313-222-6512 or firstname.lastname@example.org. Follow him on Twitter @BrentSnavely.