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Ford (F) to Acquire Electriphi, Projects EBIT to Rise Y/Y in Q2

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Ford Motor Company F is set to acquire Electriphi, a California-based start-up providing battery management and fleet monitoring software for electric vehicles (EVs). The acquisition is likely to conclude this month. However, terms of the acquisition are still under the wraps.

Electriphi, with a team of more than 30 employees, has developed and deployed EV fleet and charging management platform that save energy costs, increase reliability, and simplify the transition to EV fleets. From transition planning to charging management, Electriphi’s advanced technology is the one-stop-shop to scale one’s EV fleet ambitions.

With the take-over, Electriphi will be integrated into the newly-established Ford Pro global business unit, which is committed to redefining the market for commercial vehicles and services. Ford Pro aims at creating a one-stop solution for commercial customers to help increase vehicle uptime and productivity, while reducing complexity and the total cost of ownership. Moreover, Ford Pro expects to generate $45 billion in revenues from hardware and adjacent and new services by 2025 — up from $27 billion in 2019.

With the number of commercial vehicle customers adopting EVs in their fleet increasing rapidly, charging management continues to be an obstacle to mass adoption. These customers want convenient depot charging options to ensure their vehicles are powered every day.

Hence, Ford Pro intends to develop the most advanced charging and energy management experience for such customers. It targets pairing this commercially-focused charging solutions for the two EVs Ford has in pipeline for commercial customers — the E-Transit cargo van and F-150 Lighting Pro. Ford will commence the delivery of E-Transit to customers later this year and F-150 Lightning Pro will hit the markets in spring 2022. The buyout will enable Ford to fulfill this goal.

Both companies are highly optimistic about the latest deal. Electriphi’s technology will complement Ford’s leadership position in the commercial vehicle market and its product portfolio, thus making EVs more appealing to commercial customers. Moreover, the take-over will enhance the experience for commercial customers and provide a one-stop solution for fleet-depot charging.

In fact, Electriphi’s collaboration with Ford Pro will make the transition to EVs seamless and effortless for commercial users, along with significant economic and sustainability benefits. Bringing Electriphi on board marks the last step of Ford Pro’s strategy toward establishing a dominant position in the software market and unlocks tremendous value for commercial customers.
 
Besides, Ford Pro estimates that the depot charging industry will magnify more than 600,000 full-size trucks and vans by 2030. Ford is betting that the software developed by Electriphi will help it realize more than $1 billion in revenues just from charging by 2030.

The acquisition is part of Ford’s boarder plan to invest more than $30 billion by 2025 for electrification of its commercial and retail fleet. The acquisition, in fact, showcases Ford’s commitment to make the transition to EVs smooth for commercial customers, enabling them work better, with productive, durable and smart vehicles and connected services.

Meanwhile, Ford provided an update on its financial outlook for the second quarter of 2021.

The Dearborn automaker projects second-quarter 2021 adjusted earnings before interest and taxes (EBIT) to surpass expectations and be significantly better than the year-ago period.

Nonetheless, the automaker expects net income for the quarter under discussion to be substantially lower than the year-ago period. This is because the second-quarter 2020 results had managed to reap $1.1 billion in profit, thanks to a one-time, $3.5-billion gain on its investment in self-driving vehicle technology company Argo AI.

Ford is witnessing improvement in its automotive business since it provided the full-year financial guidance at the end of April. These improvements are driven by lower-than-expected costs and favorable market factors. Also, its credit arm is being helped by increased vehicle auction values.

At the end of April, amid the acute chip shortage, Ford had lowered its guidance and estimated a $2.5-billion hit to earnings. Consequently, it anticipated full-year 2021 adjusted EBIT in the band of $5.5-$6.5 billion.

Nonetheless, Ford now forecasts enhanced EBIT in second-quarter 2021, amid the rising customer reservations for four of its new vehicles — full-size Bronco SUV, battery-electric F-150 Lightning pickup, Maverick compact truck and all-electric E-Transit commercial van.

Per Ford, reservations have escalated to 190,000 for the revamped full-size Bronco SUV, with 125,000 of those already converted to orders. The company has also received 100,000 reservations for the battery-electric F-150 Lightning pick-up, 36,000 for the new Maverick compact pickup and 20,000 for the all-electric E-Transit commercial van.

Ford plans to announce its second-quarter results and provide guidance for the second half of the year on Jul 28.

Ford, peers of which include General Motors GM, Tesla TSLA and Volkswagen VWAGY, currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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