Traders Bet On GM to Outperform Ford in the EV Race
Jane Lu
· 3 min read
Electric vehicles
(EVs) will play a big role in the future of the auto industry, with consumer demand and government regulations contributing to their rise. Carmakers are racing to get the best electric models
to market, and Wall Street traders are following their every move. The EV sector is changing the industry, with automakers competing to advance in battery technology, software, and manufacturing processes.
Jerry
examines why traders may be placing their confidence in the underdog when looking at the competition between General Motors (GM) and Ford.
The electric vehicle market
In a conversation with
CNBC
, two traders gave their perspectives on the relationship between the two automakers’ stocks, and the state of the EV market in general. They refer to EVs as a "long-term growth driver" and note that the auto market as a whole is poised for significant growth. While the industry slowed down last year, the traders point out that it was caused by supply shortages, not lower demand.
As the supply chain rights itself, the auto industry should experience growth, and electric vehicles are clearly going to be a big part of that development.
Let Jerry find your price in only 45 seconds
No spam · No long forms · No fees
GM is the underdog (for now)
MORE: EVs Will Take Over Sooner Than You Expect
In the CNBC segment, the financial experts point out that for this year, Ford has experienced more growth. But that doesn't necessarily mean that it's a better pick. One trader describes GM as the "clear favorite between the two."
Investment firm Wedbush shed light on GM's strengths in a
Business Insider
story. EVs rely on advanced technology, including software and battery design. GM is at the forefront of technology development, pledging to increase its investment in EV research and development to $35 million over the next few years. Its Ultium battery technology is an indicator that the company's investments in EV tech are already panning out.Wedbush predicts that GM stock will perform more like that of a tech company than a traditional carmaker as it expands its EV offerings and continues to develop its technology. According to Business Insider, one Wedbush analyst set a 12-month price target for GM of $85, up from $58 in early July.
GM's ambitious plans
MORE: The Dominance of Lithium-Ion Batteries in the EV Market Could Be Over
A feature on the
GM
website declares that the company "is on its way to an all-electric future, with a commitment to 30 new global electric vehicles by 2025." One key development is the Ultium battery technology, which GM predicts will eventually cost 60% less than its current EV batteries. The company also touts its modular vehicle designs, allowing more efficient manufacturing. The brand is thinking beyond the vehicles themselves—GM will work with EVgo to build more than 2,700 fast-charging stations across the U.S.
Whether you're closely following GM's market performance, or just interested in the performance of its EVs, it's definitely a carmaker to keep your eyes on.
Don’t forget to insure your electric (or any other) vehicle with the right car insurance coverage. You can use Jerry to easily compare rates from 50 top providers to get the best price for the coverage you need. The free app helps you save money without the hard work.
