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RE: Is Ford Betting It All On Self-Driving Cars?
Nothing will help send their stock higher in the short term (2-3 years). Auto is cyclical and peaked out last year. The Auto industry recovered from the last financial crisis by offering longer term loans that reduced monthly debt payments while also issuing more and more loans to sub-prime borrowers. Remember cash for clunkers? That program also helped the recovery by taking millions of used cars off the market which raised the value of the remaining models. Used car prices are coming down and auto loan defaults are rising fast. Ford's revenue stream is heavily dependent on consumer debt that is nearly tapped out and moving toward default. Ford is in trouble along with all the other brands.
That makes a lot of sense. The institutional investors must realize that, explaining why the stock has continued to decline. Hopefully by advancing a new technology, they can stay relevant. It would suck if we see another financial crisis revolving around sub-prime auto loans. I remember John Oliver did an episode on this very topic.