After the U.S. posted strong, revised Q4 GDP data, the strong economy suggests that automotive stocks have more upside from here. Stellantis (STLA), Toyota (STLA), and General Motors (GM) are at 52-week highs. Markets anticipated profitability rising this year.
Ford (F) shares are halfway back to yearly highs. The firm continues to disassociate its growth strategy away from electric vehicles. According to the Detroit Free Press, Ford will cut its hourly workforce at its F-150 Lightning EV factory in Michigan. It will pivot its profit growth strategy by building more plug-in hybrid vehicles instead. 700 staff will be transferred to the plant that makes Bronco and Ranger vehicles. While 700 workers will stay at the F-150 plant, Ford will offer the rest with a $50,000 retirement package. They also have the option to take a reassignment.
Lucid Gets Lifeline
Tesla’s (TSLA) over 30% drop in Q1 is a strong indicator of the weak prospects in the EV market. Lucid Group (LCID) briefly rallied on Mar. 25 when an affiliate of the Saudi PIF wealth fund invested $1 billion. This cash injection offsets Lucid’s first-half cash flow losses. Despite having a more attractive design and performance specification than Tesla, sales are too weak.
Lucid needs to achieve economies of scale by cutting production costs. Until then, speculate on LCID stock. It is too risky to invest in for the long term.
