Financial News
Ford Motor vs. General Motors: Two Increasingly Dissimilar Firms In The Same Industry
“Same industry. Two firms.”
Recently, influential Morgan Stanley auto industry analyst Adam Jonas defined General Motors and Ford Motor this way, bitter rivals for almost a century.
The two have competed in sales, performance, and styling of new cars. Better financials and early electrified and autonomous car movements have given GM an edge. GM beat Ford in third-quarter numbers.
GM is broadening its battery and self-driving car businesses in preparation for a 2035 electric vehicle only strategy. Ford is investing in EVs and traditional companies. Ford anticipates 40% of its global sales to be electrified vehicles by the end of the decade.
In the meanwhile, both businesses focus on high-margin pickups and SUVs and use billions in earnings to invest in driverless and electrified vehicles.
Wall Street experts are watching the growing categories for a Detroit carmaker to stand apart.
“It’s a really competitive market, and they all tend to be quite fast followers from that regard,” said Edward Jones analyst Jeff Windau. “Over time, differentiation becomes difficult.”
Under Mary Barra, GM reduced costs years ago.
In a recent interview, Morningstar analyst David Whiston said, “GM is obviously functioning in a higher gear with the big disparity in margins between the two companies.” “GM had a lot of that anguish a few years before.”
The message never sticks.
According to FactSet analyst assessments, both stocks are “overweight” on Wall Street. Due to rising interest rates, inflation, and recessionary fears, both automakers are down more than 30% this year.
GM and Ford share a market cap of $54 billion, but GM trades for $40 a share and Ford for $14. Ford disbanded its Argo AI autonomous vehicle unit last month, claiming it didn’t believe in the business or its future monetization.
Ford CFO John Lawler told reporters on Oct. 26 that lucrative, fully autonomous vehicles at scale are still a long way off. “We also realized we don’t have to design that technology.”
“We’re witnessing greater separation between the company’s operational commercial driverless services and those that are still caught in the trough of disillusionment,” Vogt said, presaging Ford’s decision to dissolve Argo. ц
Cruise announced its robotaxi service would cover most of San Francisco. Months after the business commercially launched its self-driving vehicle fleet during limited nighttime hours.
Ford says, “We think they’ll get there eventually, but it’s going to take a lot longer, and we have other fish to fry.”
Ford also spent billions on electrified vehicles and lower-capability driver-assist technology like its hands-free BlueCruise highway driving system.
GM was one of the first automakers to invest billions on electric vehicles and end sales of internal combustion engine vehicles by 2035.
Ford has outsold GM in EVs, while GM focuses on luxury cars like $100,000-plus Hummers and Bolt EVs with older battery technology.
“GM jumped in earlier,” Abuelsamid added. “But if you go beyond the auto sector, at the technological industry, being first to market in the long term doesn’t necessarily guarantee success.”
GM sold 22,830 all-electric vehicles, most of which were Bolts, while Ford sold 41,236. The business “stuffed” battery packs into popular gas-powered vehicles to make them electric.
GM has an EV architecture. Ford wants to follow suit eventually, but its near-term approach has given it a sales lead, which buyers appear to like. Ford makes hybrids and plug-in hybrids, while GM just has a prospective “electrified” Corvette.
GM is Tesla’s lone competitor.
A U.S. joint venture making its own battery cells. The company plans four U.S. joint venture battery plants, including one in Ohio that began cell production earlier this year.
Ford’s $5.8 billion joint venture with SK to build twin lithium-ion battery factories in central Kentucky won’t start production until 2026.
Windau of Edward Jones said GM may be ahead of Ford now, but others may catch up in the future.
“Moving faster is an advantage,” he remarked. “Again, a lot of players are taking a similar approach.”
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