Will Ford's Leaner EV Approach Give It a Stronger Foothold in Europe?

U.S. legacy automaker Ford F is joining forces with France-based car company Renault RNLSY to jointly develop affordable electric vehicles (EVs) in Europe. Ford’s passenger-car share in the continent has declined by almost half since 2019. As such, the U.S. auto giant Ford needed a fresh way to re-enter the EV race with scale and sharper economics. Partnering with Renault gives it exactly that.

The collaboration will center on developing smaller, more affordable Ford-branded EVs built on Renault’s Ampere platform, a technology base designed for cost competitiveness in a market now flooded with low-priced Chinese electric cars from companies like BYD and XPeng.

Production will take place in northern France, inside Renault’s ElectriCity network. By relying on Renault’s EV architecture and factory scale, Ford will not have to make a massive upfront investment usually required to launch an all-new EV line. And that’s particularly important at this time. Back home, with the U.S. government pulling back federal support for EVs, Ford now faces the burden of funding combustion-engine programs while still financing next-generation EVs. So, an opportunity to share costs and lower risk is a welcome one.

The first model is expected to hit showrooms in early 2028, and while that timeline may feel distant, it signals the start of Ford’s renewed product push in Europe.The agreement also opens the door for a separate collaboration on light commercial vehicles, a segment both companies know well.

The new deal with Renault complements Ford’s long-standing platform-sharing work with Volkswagen, giving Ford a diversified European EV strategy rather than dependence on a single partner.

Alliance with Renault is expected to help Ford address its most pressing European vulnerabilities. It gives Ford a credible EV pipeline, lowers its cost curve, and positions it to compete with both traditional rivals and fast-moving Chinese automakers better.

General Motors GM, Ford’s closest peer, is also entering into similar collaborations to bring products to market faster and at lower cost through shared development. General Motors and Hyundai have tied up to co-develop five vehicles for the Americas. Their plan includes four models for South and Central America—a compact SUV, a car and a midsize pickup—along with an electric commercial van for North America. General Motors will lead midsize truck, while Hyundai will oversee compact car and electric van, with launches starting in 2028.

Zacks Rundown on Ford

Shares of Ford have risen 38% year to date, outperforming the industry’s gain of 16%.  

From a valuation perspective, F appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.33, lower than the industry’s 3.44. 

See how Ford’s earnings estimates have been revised over the last 90 days,

F carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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