Revving Up

Talk about old school. The day's best performer was Ford. The company has spent several years trying to look more like Tesla and less like some of America's oldest companies. It might be working. This morning, Ford said that it was doubling production capacity for the new electric F-150 pickup, to 150,000 a year. 

“The reality is clear: People are ready for an all-electric F-150, and Ford is pulling out all the stops to scale our operations and increase production capacity," Al Root wrote on Barron's today. "More capacity means interested buyers can get their EV faster than expected."

Ford shares had their best day since June 2020, jumping 11.7%. At $24.31, the stock closed at its highest level in more than 20 years. 

The excitement makes sense in the context of Tesla. The electric car maker's stock trades at 130 times next year's profit estimates. Ford, on the other hand, trades at just 12 times. Any move toward Tesla -- and an electric F-150 is a big step in that direction -- should push Ford's multiple just a bit closer to Tesla's. No actual sales are necessary. It's all about Ford's perception as a real innovator in the EV space. 

The F-150 is the best-selling vehicle in the country. An electric version could be a massive hit. And a boon to Ford's stock. 

General Motors also had a big day. Its shares rose 7.5% despite lukewarm delivery numbers for the fourth quarter. Once again, it's electrification that matters most. Al notes that GM CEO Mary Barra is set to introduce an electric version of its own Chevy Silverado pickup later this week at CES in Las Vegas.