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This is the first moment since 2021 for the U.S. automaker Ford came in the spotlight again, as its shares sharply rose by nearly 10% since the end of June, reaching 11-month highs. A little history might help to understand what's happening. In 1913, Ford launched the world's very first automobile conveyor line at its Michigan plant. Although conveyor line technology had been used before in some other industries, it was Ford that first applied it to mass production of vehicles. This invention revolutionized the auto industry, significantly reducing assembly time and cost. Once the automotive capital of the world, thanks to Ford, General Motors and Chrysler, the Detroit region of the U.S. has since fallen into decline in the 21st century. Ford has been involved in projects to revive manufacturing in Detroit, but without much success because the U.S. employees are more expensive than in the Asian region. While Ford Focus compacts and other models have consistently ranked among the top 10 popular cars in Europe, financial returns have been weak in terms of profitability over recent years. During the COVID pandemic, the company has emphasized its plans on electric cars making - as a result, its market value had tripled in 2021 to historical peaks around $24 per share. However, by 2022, all this bullish momentum was completely lost, and so the company's shares have since languished within a dull range of $9.50 to $13, with rare price spikes up to $15.

Ford shares even reset its 5-year anti record low at $8.44 per share this April. But Ford is now trading around $12 again. And yes, it is still within the same price range just mentioned above, but there is an encouraging nuance: a clearly accelerating price dynamic of the last two weeks is boosted by the news. Ford said on July 8, it believes its $3 billion Michigan electric vehicle battery plant, which is almost 60% complete, will qualify for recently adopted production tax credits after a big and beautiful tax and budget bill revised the rules. Before that, in May and June, Ford warned over that the Republican government of the US could terminate company's tax credits, which supported the manufacturing of electric vehicle batteries using Chinese technology, according to the previous Congress version of legislation. But the juridical environment has changed, and now Ford's plant in Michigan, which is slated to employ 1,700 workers is reportedly "on track to qualify for the production tax credit", the company's management noted, adding that is "a win for customers" and also "a win for American competitiveness".

The Alliance for Automobile Manufacturers, a group representing General Motors, Ford, Toyota, Volkswagen and other world leaders, praised the final version of the bill for revising its language on a battery production tax credit to preserve "auto-related advanced manufacturing across the country and prohibited Chinese companies from eligibility." This may offset slowing demand for electric vehicles. Before that news, Ford's plant has attracted scrutiny from the government and congressmen because of its ties to the Chinese partners. The new legislation ends a $7,500 tax credit for buying or leasing new electric vehicles on September 30, as well as a $4,000 tax credit for used EV cars. This law also cancels penalties for failing to meet the so-called corporate average fuel economy shortfalls to make building more traditional gas-powered vehicles easier.

Ford's recent bets on electric cars failed. Its fully-electric models faced a sales decline of around 30% YoY, with elevated price tags being only one of the reasons behind it. Ford's total sales added more than 14% during the same annual period. And now Ford's battery production will most likely make a significant contribution to the payback, since it retains benefits. Ford's focus on traditional vehicles could make this segment forward. An auto-loan interest deduction may also increase Ford's strength for its coastal states' clients, its CEOs commented. We feel that the indicated favourable fundamental background for the business will force Ford shares to test the upper range around $14.5 or higher, at least, which already means a profit potential of 22% vs the current price below $12. This profitable result can be strengthened in case of a break through the $15 technical resistance barrier. Ford shares will rise either this summer or never this year.