Ford Motor Company (NYSE: F) fell on Thursday after an analyst slashed his stock price forecast for the auto giant. By the close of trading, Ford's shares were down 3% after falling as much as 5.3% earlier in the day.
Wells Fargo analyst Colin Langan is worried that legacy automakers like Ford and General Motors (NYSE: GM) will see their earnings fall in the coming years, as they shift more of their production toward electric vehicles (EVs).
For Ford specifically, Langan warns that the costs of raw materials needed to build EVs have surged due to supply constraints. He estimates that these costs could force Ford to increase the price of its most popular electric vehicles, the Mach-E sports car and Lightning pickup truck, by as much as $4,800 and $8,500, respectively, or absorb the costs and suffer the corresponding erosion to its profit margins.
Source Fool.com