Which Of These Automakers Is The Better EV Stock In The Stock Market Today?
The automotive space is going electric at a frantic pace, with old and new companies seemingly rushing into the space. That’s expected because electric vehicle stocks have made unprecedented gains in the past year. While there are a couple of newly start-ups that did not materialize, top EV stocks like Tesla (NASDAQ: TSLA) and Nio (NYSE: NIO) continue to surprise Wall Street with their strong growth in deliveries. Ask any investors today. Chances are, these two EV names are likely to be on top of their list of the best EV stocks to buy in the stock market today.
After all, there is a good reason to be bullish towards the EV space. We all know the world is shifting towards renewable energy. Now, with Biden’s infrastructure plan aligning with the auto industry’s EV goals, it makes even more sense to put up a list of top EV stocks to buy. For instance, General Motors (NYSE: GM) and Ford (NYSE: F) are two classic American automakers that have been on steady uptrends since the start of the year.
On the surface, these two auto stocks may seem less exciting because of less volatile movements in their stock prices. However, it’s worth mentioning that these legendary automakers are not resting on their laurels when there’s innovation taking place in the automotive space. There’s no question that EVs are indeed a growing market. And these respectable automakers would inevitably want a piece of it. The real question here is, which one of these automakers offers more upside? Let’s find out.
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General Motors (GM) Stock Hit New Record On Plans For Chevy Silverado Pickup
General Motors (GM), one of the world’s largest automakers has been in the limelight recently. GM stock closed at a new record on Tuesday’s intraday trading. This came after the automaker confirmed plans to produce an all-electric Chevrolet Silverado pickup at an assembly plant for EVs. The same plant is also meant to build the upcoming GMC HUMMER EV SUV.
Following the announcement, GM stock hit an intraday high of $63.44 before closing 1.5% higher at $61.94 per share. The rally in its stock price came after a few positive news. Earlier this week, the stock popped following positive remarks from Wells Fargo analyst Colin Langan. The analyst placed an overweight rating and a $64 price target on GM stock on April 5. Langa acknowledged that the GM still needs to restructure its international operations to further reduce costs and exit unprofitable markets.
But he noted that the company’s North American operations are generating profit margins that are particularly impressive. That’s especially so considering the current coronavirus-related industry downturn.
GM Is A Leader In Autonomous & Electric Vehicles In The Making
If you think electrification is the only thing GM is doing, you may be surprised with its progress in the autonomous vehicle (AV) technology space. The company has partnered with Microsoft (NASDAQ: MSFT) in leading a $2 billion investment round in self-driving car start-up Cruise LLC. This is a deal that could potentially bring the software giant’s cloud and edge computing capabilities to the venture.
With the support from General Motors, Cruise has reportedly agreed to acquire Voyage, a self-driving car start-up that operates in retirement communities. This acquisition adds to ongoing consolidation in the AV sector after years of enthusiasm in the potentially multi-trillion market for the transportation sector. That said, the dedication that GM shows in ramping up its self-driving capabilities is clear. And investors looking to tap into the space might find GM stock an attractive investment option.
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Ford’s (F) Retail Sales Are Booming
After a few decades of staying under the radar, F stock appears to be revving back up. Admittedly, it is still a far cry from its high of around $100 per share two decades back. But it has built up some momentum amid booming demand for trucks and the Mustang Mach-E.
It’s worth mentioning that the Mustang Mach- E appears to be cutting into Tesla’s comfortable lead in the EV market right out of the gate. The company said this week that its U.S. retail sales jumped 23% in the first quarter from the same period last year.
Ford has been working hard to polish its vehicle lineup. If you are a petrolhead, you would have noticed it as well. What’s more, Ford has announced a near doubling of its planned investments in EV to $22 billion through 2025. On top of its own vehicle line-up, Ford was also an early investor in Rivian Automotive. On January 19, Rivian received a new round of investment funding that valued the company at about $27.6B.
Ford & Google Teaming Up For Connected Cars
Ford and Alphabet (NASDAQ: GOOGL) are entering a six-year deal that will make the tech giant responsible for much of Ford’s growing in-vehicle connectivity. This partnership is designed to streamline Ford’s operations and accelerate an ongoing $11 billion restructuring plan.
Among other things, the partnership will allow access to Google’s maps and navigation system as well as the use of smartphone-style over-the-air (OTA) updates. That not only allows Ford to update its existing vehicle software. It also means that users can gain access to new software features well after they purchased their vehicle.
“As Ford continues the most profound transformation in our history with electrification, connectivity, and self-driving, Google and Ford coming together establishes an innovation powerhouse truly able to deliver a superior experience for our customers and modernize our business,” said Jim Farley, president, and CEO of Ford.
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Bottom Line: F Stock Vs. GM Stock
By and large, both are compelling investments for electric vehicles. We are looking at what some might consider legacy players in the automotive space. If you are a person who appreciates the potential of what in-car connectivity will do, Ford appears to be leading in this aspect. With the introduction of more technology into its vehicles, can we see more upside to F stock?
On the flip side, if you believe in the larger scheme of things with automotive driving, then GM stock may appear to be the more favorable EV stock. After all, the company is making strides in the autonomous vehicle space. That’s in addition to its strong pipeline of EVs under its belt. With all these in mind, GM stock might just have the edge here.
