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In the turbulent stock market seas, sell-offs can be intimidating. Yet, they often present opportunities to buy quality companies that have demonstrated their capacity to weather even the fiercest storms. Consider, for instance, the storied automaker Ford Motor Company (NYSE: F), whose stock is currently down 55% from its all-time high.

In January 2022, FordU+02019s market capitalization exceeded $100 billion for the first time in its history. Investors were buoyed by the companyU+02019s renewed focus on electric vehicles (EVs), which CEO Jim Farley placed at the heart of his turnaround strategy. But as we forge into 2023, FordU+02019s stock has seen a steep decline from that peak.

Ford aims to improve profit margins

The company flagged unexpectedly high costs throughout 2022 due to inflation and supply chain disruptions, culminating in a net loss of $2 billion for the year. However, Farley was forthright during the companyU+02019s Q4 earnings release: "We should have done much better last year," he conceded. Ford also acknowledged letting "$2 billion in profits slip through its fingers" due to controllable factors.

Regardless, Ford isnU+02019t turning down the volume on its ambitions. Instead, the automaker is sticking to its 2023 guidance, projecting between $9 billion and $11 billion in adjusted EBIT and approximately $6 billion in adjusted free cash flow. 

FordU+02019s goal is to achieve an 8% EBIT margin on its EV unit and reach a production rate of two million EVs by 2026, a significant increase from the projected 600,000 by the end of this year. 

This plan has faced criticism for its aggressive nature. 

Still, Ford seems undeterred, sticking to its vision while laying out a detailed roadmap of profit expectations for its critical business units. CFO John Lawler was frank in acknowledging past shortfalls: "WeU+02019ve talked about this for years. YouU+02019re not going to believe us until we start

delivering it… we have to prove it." The companyU+02019s new commitments will thus be crucial in proving to Wall Street that its ambitious goals are more than just lofty promises.

FordU+02019s "Model E" EV business is projected to incur a $3 billion loss this year, but profits from its traditional "Blue" and "Pro" fleet businesses should provide a buffer. Meanwhile, the companyU+02019s traditional car business reported earnings of $2.6 billion in Q1, and its fleet operations pulled in $1.4 billion.

Moving forward, Ford aims to streamline operations and boost profits from traditional products to low double-digit EBIT margins, a substantial improvement from 7.2% in 2022. The company also plans to increase the capacity for its internal combustion vehicles by over 160,000 units in the next ten months.

As part of its forward-looking strategy, Ford also aims to leverage software and subscription revenue models. For example, the companyU+02019s BlueCruise hands-free highway driving system could generate $200 million in revenue, based on an expected take rate of 20% from an estimated half a million vehicles equipped with the technology in 2024.

Ford and Tesla forge an EV partnership

Adding another string to its bow, Ford recently announced new supply deals for lithium products to support its ambitious plans to boost electric vehicle production in the coming years. 

These collaborations include a "strategic partnership" with Albemarle (NYSE: ALBE) to supply more than 100,000 metric tons of lithium hydroxide – enough for approximately 3 million EV batteries – from 2026 to 2030. 

They will also collaborate to develop battery-recycling solutions, a critical element of sustainable EV production. Other agreements with Compass Minerals International (NYSE: CMP), EnergySource Minerals, and Canadian miner Nemaska Lithium will further ensure FordU+02019s access to vital lithium resources.

In another surprising turn of events, Ford announced a partnership with its competitor Tesla (NASDAQ: TSLA) on charging initiatives for its current and future electric vehicles. This partnership, confirmed by Ford CEO Jim Farley and Tesla CEO Elon Musk, will allow current Ford owners to access more than 12,000 Tesla Superchargers across the U.S. and Canada starting next year, using an adapter.

Furthermore, FordU+02019s upcoming generation of EVs – expected by mid-decade –will feature TeslaU+02019s charging plug. This integration will allow Ford vehicle owners to charge at Tesla Superchargers without an adapter, marking Ford as one of the first automakers to directly tap into TeslaU+02019s extensive charging network.

Though Tesla continues to dominate the EV sector by a significant margin, Ford ranked second in fully electric vehicle sales in the U.S. last year, with 61,575 electric vehicles sold. This collaboration with Tesla signifies FordU+02019s commitment to the EV sector and its readiness to adapt and innovate to compete more effectively.

So, is Ford stock a good buy? 

Given the companyU+02019s significant investments in EVs, its improving profits, its strategic partnerships for crucial minerals, and its willingness to work with competitors to achieve greater access to essential infrastructure, the future for Ford appears promising.

Investing in a company during a downturn may feel counterintuitive, but FordU+02019s ongoing initiatives indicate that it is a company preparing for growth. Its strong focus on EVs, backed by important supply deals and strategic partnerships, suggests a company that is not merely riding

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