Ford Motor CEO Jim Farley emphasized the significance of the company’s “Pro” fleet business and urged Wall Street to redirect its attention away from Tesla and its Full Self-Driving (FSD) systems. Speaking at a Wolfe Research conference, Farley presented Ford Pro as the future of the automotive industry, drawing parallels with the trajectory of Deere & Co., whose stock increased by about 235% over seven years.
Ford Pro encompasses traditional fleet and commercial businesses, along with emerging operations such as telematics, logistics, and connective services for business customers. The diverse clientele ranges from local tradespeople to large corporations. The unit also includes parts and services tailored for businesses, contributing to its robust performance.
Farley highlighted the unit’s substantial growth, noting that Ford Pro’s pretax earnings doubled to $7.2 billion in the previous year. He underlined its potential by disclosing that the unit has half a million subscribers, boasting an impressive 50% gross margin. The CEO’s optimistic outlook for Ford Pro led him to recommend investors focus on this segment for insights into the future of the automotive industry.
Comparing Ford Pro to Deere & Co.’s growth trajectory, Farley positioned the unit as a key driver of Ford’s profitability. He anticipates the Pro unit’s pretax earnings to further increase to between $8 billion and $9 billion in the current year. This surpasses earnings expectations for Ford’s traditional “Blue” business, projected at about $7 billion to $7.5 billion, and underscores the significance of the Pro business in Ford’s overall strategy.
In contrast, Farley discouraged Wall Street from fixating on Tesla’s FSD and implied that the future of the auto industry lies in Ford’s Pro fleet business. While Tesla’s FSD revenue remains undisclosed, many analysts have speculated on its potential to generate significant revenue by 2030.
Farley’s strategic emphasis on Ford Pro reflects the company’s commitment to diversifying its business and tapping into emerging opportunities in the automotive sector. The robust performance of the Pro unit positions it as a key player in Ford’s portfolio, contributing substantially to the company’s overall earnings and solidifying its role in the rapidly evolving automotive landscape.