Ford Says Goodbye to 2 Popular Crossovers

Source Motley_fool

Key Points

  • Ford is planning to say goodbye to the Escape and Corsair.

  • Ford is directly replacing some of the production with an upcoming electric pickup truck.

  • Stellantis has made similar moves, only to regret them.

  • 10 stocks we like better than Ford Motor Company ›

Ford Motor Company (NYSE: F) investors and consumers are about to wave goodbye to a couple of very successful crossovers. In a shock to some, Ford recently announced the Escape and Lincoln Corsair will both be retired and discontinued at the end of the 2026 model year. For the Escape, it means the end of a good run that was highlighted by helping revive Ford after the 2008 financial crisis and the Great Recession. For investors, though, this is a bit of a risk for Ford -- let's dig in.

Ford's 2022 Escape driving down a tree-lined road.

Image source: Ford Motor Company.

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Gone but not forgotten

Ford's announcement shocked many because the two crossovers are popular and sell well. In fact, the Escape sold 93,805 vehicles in the U.S. through July, which was enough to outsell Ford's iconic Bronco and Bronco Sport separately, and that's with the Bronco posting impressive 45% year-over-year growth. Meanwhile, the Corsair was the second-best-selling Lincoln model through July, behind only the Nautilus.

For consumers, if you're a huge fan of the Escape, fear not because Ford will still sell the 2026 model well into next year. If you're an investor, this is a little worrisome because one of the most important things you can do in the automotive industry is cover key segments. Exiting them without a plan doesn't work out well -- just ask Stellantis. Stellantis is currently scrambling to replace the Jeep Cherokee, a nameplate that accounted for a sizable chunk of Jeep sales before it was discontinued earlier this decade.

However, as you can see in the graph below, despite outselling popular models through July, the Escape has actually been having some of its worst-selling years ever over the past five years.

Graphic showing Escape annual sales history.

Data source: GoodCarBadCar.net. Graphic source: Author.

Unlike Stellantis, Ford might already have its replacement. It recently announced an upcoming midsize electric pickup truck, more similar in size to the Maverick than the Ranger, and priced at around $30,000. This is a very compelling price point for an electric vehicle (EV), especially a truck, even if we don't see it until 2027.

In fact, Ford is doing exactly the opposite of Stellantis right now. Stellantis is working to replace the Cherokee-sized SUV and bring back a gasoline-powered version of the Charger muscle car while simultaneously hitting pause on its all-electric Ram pickup truck.

On the flip side, Ford is directly replacing the production of both the Escape and Corsair with this upcoming pickup at its Louisville Assembly Complex. Ford has invested around $5 billion in the Louisville complex, creating roughly 4,000 jobs as it prepares its recently unveiled Universal EV Platform to usher in a family of up to eight new EVs.

A big gamble

Ford is making a big gamble that it can replace more profitable gasoline-powered vehicles with its electric pickup. That could make some investors skittish, considering that Ford's Model-e, the division responsible for EVs, lost $5.1 billion during 2024. The good news is that Ford anticipates this electric pickup to be profitable early on, which is a tangible step forward in the evolution of EVs that have so far sparingly produced a profit for anyone across the globe.

It's also a risk to swap out two popular gasoline models with an electric pickup when you consider that EV sales have been slower to gain traction in the U.S. than anticipated. Further, with the current administration deadset on rolling back EV incentives and tax credits, the road in the near term might be even more challenging.

For long-term investors, while this move could give you reason to pause, rest assured that it's at least a strategic decision looking into the future -- something Detroit automakers haven't always been known to do.

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Daniel Miller has positions in Ford Motor Company. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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