Ford (F) is delaying the launch of its plug-in hybrid Escape sport-utility vehicle to 2021, reports Bloomberg. The publisher noted that thousands of similar Kuga SUVs have been recalled in Europe due to fire-related recharging problems.
“We’re moving production to next year while we investigate what happened to the Kuga in Europe,” Mike Levine, a company spokesman, told Bloomberg. “None have been sold in the U.S.”
According to the publisher, the Escape plug-in hybrid should have gone into production this past spring but this was postponed to summer after factories were closed for two months due to the coronavirus pandemic.
The timeline has now been delayed once more, this time to 2021, due to problems with the Kuga model which has the same battery and engine as the Escape model.
Ford of Europe is now focused on fixing its Kuga plug-in from venting heat from the batteries, Jay Ward, another company spokesman, told Bloomberg. According to Ward, seven vehicle fires have been reported in Europe, prompting the recall of 20,500 Kuga models. He added the issue could take months to resolve.
As a result, Ford is now advising European customers not to plug their Kuga cars into a charger and instead operate the vehicle in conventional hybrid mode. Ford also issued 500-euro gasoline cards to reimburse customers for a loss in fuel economy, Bloomberg reports. (See F stock analysis on TipRanks).
Currently, the Street is cautiously optimistic on the stock with a Moderate Buy analyst consensus. With shares down over 16% year-to-date, the average analyst price target of $8 implies upside potential of 4% from current levels.
Benchmark analyst Michael Ward has just upgraded F from Hold to Buy, with a $10 price target (29% upside potential). “Better than expected North American production, a positive shift in mix improving metrics in the auto credit markets, in our view, are the primary drivers for better than expected earnings performance in the third quarter,” Ward told investors.
The analyst added: “By our estimates, inventory will end the year about 100,000 units below target, proving a tailwind for earnings into the second half of 2021.”
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