In the last decade, electric vehicle demand is accelerating. Only a supply shortage in raw materials and
semiconductors is slowing sales. Eventually, EV suppliers will resolve the logistics delays.
Where does that level traditional automotive firms? General Motors (GM) and Ford (F) trade at a steep
discount.
Last week, Ford posted EV sales doubling at around 222%. The astute investor will look at the unit sales
instead. It sold 6,254 units in the month. In addition, Mach-E sales rose by 166% Y/Y.
Ford posted U.S. sales of 154,461 vehicles in May 2022. Sales fell by 4.5%, compared to a 10.5% decline
in April 2022.
GM took a different approach to capture market share. It cut the prices of its Chevy Bolt to earn the
cheapest EV in the U.S. title. The 2023 Bolt will cost $5,900 less, while the larger Bolt EUV price will fall
by $6,300.
GM’s price cut contrasts with Tesla (TSLA) raising its vehicle prices. The Model 3 has a higher price tag,
while the autonomous driving package will cost more than other models. GM’s aggressive price cut is a
dangerous move for investors. Input costs are rising, so GM will absorb the lower margins to gain market
share.
Tesla will face weaker demand if consumers choose a smaller EV to save money.
GM and F stock are both compelling EV plays at these levels.
