When Ford introduced the 2015 Ford F-150, the two main concerns about the new truck centered around its aluminum-heavy body, specifically — what it would take to repair the truck and whether or not its heavy aluminum content would increase the cost of insuring it. Now, all that has been put on the back burner, as the big drop in gasoline prices are causing Wall Street to bet against Ford’s newest creation.
The concern revolves around whether or not The Blue Oval will be able to command premium prices for the new F-150 amid the lowest fuel prices in years. These concerns caused Ford’s stock to drop nearly a full point to $14.09 per share, the stock’s lowest level in five weeks, following a downgrade by Deutsche Bank AG. The timing couldn’t be worse for Ford, as the first shipments of its all-new aluminum trucks are just now arriving to dealer lots.
Rob Lache, an analyst at Deutsche Bank in New York, said in a note that with gas prices at a 5-year low, consumers may not be motivated to pay more for the F-150. Also, Ford, along with other automakers, faces “regulatory cost burdens” to achieve the CAFE fuel economy standards by 2025. Lache said these standards are “unprecedented.”
“Ford’s new 2015 F-150, which incorporates a number of advanced but costly powertrain, light-weighting and safety technologies, represents one of the most prominent early examples of this forthcoming change,” Lache wrote. “We question whether consumers will pay the price for this content with $2-$3 gas.”
Time will tell whether the low fuel prices cause any real issues for Ford stock or its newest (and most-profitable) vehicle. But given just how great of a truck the new F-150 is, we think it will do very, very well… come high or low fuel prices.