And while most used New car If running on an internal combustion engine, the industry Electric car The future. For the last decade, the best way to recreate that trend is Tesla.. Shareholders in that particular transaction have been brilliantly rewarded: since June 2011, the automaker’s share has risen by more than 10,000%.
But this year, investors are betting that old security guards in the industry can make their business work better in an electrified future.
At an industry conference on Thursday Ford CEO Jim Farley said The company’s second-quarter earnings could be better than expected. Earlier this week GM Announced to increase investment For electric vehicles, it will grow from $ 27 billion to $ 35 billion by 2025.
And it was only a few weeks ago that Ford announced an ambitious plan to electrify more fleets and announce electricity. F-150 Lightning Based on that Best-selling car, While Announced plans to invest $ 30 billion in electric vehicle development In the next 5 years.
This year’s rally of GM and Ford stocks also reminds us (in yet another way). How different this recovery is From what we endured after the financial crisis.
With GM Chrysler Bankruptcy during the 2008-09 recession. Ford barely stopped its fate. Now, these companies are linking the surge in consumer demand to increased investment to catch up with Tesla worldwide.
These announcements from Ford and GM also come as emerging competitors like Nicola and Lordstown Motors. Difficult to communicate accurately with investors.. Nikola shares, which fell more than 50% in 2020, rose about 11% this year until Thursday’s closing price, while Lordstown shares halved this year. Both Nicola and Lordstown replaced their CEO after a bold announcement about their car’s orders and capabilities didn’t check out.
In the years before the pandemic, the rise of Tesla and the electrified future of the industry put pressure on the stocks of Ford, GM, and other automakers. Since GM’s bankruptcy in the fall of 2010, both GM and Ford shares have been beaten by the entire market. This year’s profits will not wipe out that slump. And the lead that the traditional car industry has bet on Tesla becoming a major electric car brand will be hard to overcome.
But today, what investors see at Ford and GM is at least an opportunity. Opportunity to benefit from post-pandemic economic expansion. And the chance to remain a major player in tomorrow’s electric vehicle market.
Old-fashioned car makers Ford and GM are new stocks to watch
Source link Old-fashioned car makers Ford and GM are new stocks to watch