Ford’s Ambitious Roadmap

Investing in Electric Vehicles

Ford (F) is investing heavily in digital technology as it works to catch up with Tesla (TSLA) and General Motors (GM). Ford plans to invest $22 billion in electric and digitized vehicles over the next five years. This could include investments in battery production, something GM is working on currently with the South Korean company LG Chem . Ford also announced plans to spend $7 billion on autonomous vehicle research and development.

These big initiatives have garnered praise from Ford’s investors and have lifted the company’s share price. But the company could face some bumps along the road as it pursues these projects.

Semiconductor Shortages

A semiconductor shortage around the world is hampering electronics makers as well as car companies. Demand for chips has surged over the past year as consumers have purchased more laptops, 5G phones, and other products powered by semiconductors. Manufacturing delays and supply chain difficulties resulting from the pandemic have added to the shortage.

Because of the lack of available semiconductors, Ford announced last week that it will curb production of its F-150 pickup truck, which is Ford’s most profitable vehicle. Analysts expect that the drop in production could cause Ford’s bottom line to fall by $1 billion to $2.5 billion this year.

Ford is not alone in struggling with the semiconductor shortage. General Motors announced it will halt production at three North American factories for a week because it does not have access to enough semiconductors.

Competition in the Autonomous Driving Sphere

Ford will also face significant competition as it works to break into the EV market and the autonomous driving sphere. The auto industry has been buzzing recently about discussions between Kia and Apple (AAPL) about a potential partnership.

The two companies are talking about an agreement through which Kia would manufacture an Apple-branded autonomous vehicle called the “Apple Car.” If a deal is reached, production of the vehicles could begin as soon as 2024. However, nothing is set in stone. As changes unfold in the auto industry, Ford is putting its foot on the gas in order to make sure it stays relevant.

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