Electric vehicle stocks have lit up the stock market recently, as investors look to cash in on what they see as the inevitable trend away from internal-combustion-powered vehicles. Plenty of names that most people have never heard of are jockeying for position to become the leader of the fast-growing EV industry.
Yet perhaps most interesting is what’s happening with EV stocks on Thursday. Even as many market indexes are down, one part of the EV industry that many had left for dead is roaring back with a vengeance. Below, we’ll look more closely at the day’s most unlikely winners in the EV space and what they’re saying about the broader market.
Mixed markets on Thursday
Stocks were generally lower on Thursday morning, with weakness centered on high-growth technology stocks. As of 11:30 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) had pushed higher by 52 points to 34,652, but the S&P 500 (SNPINDEX:^GSPC) had lost 8 points to 4,200, and the Nasdaq Composite (NASDAQINDEX:^IXIC) had declined 114 points to 13,642.
Big moves from big automakers
The names of those unlikely EV winners are Ford Motor Company (NYSE:F) and General Motors (NYSE:GM). Many had thought that the automotive pioneers would get left behind by the move toward vehicle electrification, but news from both companies today supported the notion that Ford and GM are far from surrendering the EV space to up-and-coming tiny rivals.
Shares of Ford were higher by nearly 6%. The company reported May sales figures that showed the automaker is overcoming challenges to find pathways to long-term growth.
Looking at the numbers reveals a lot about the trends Ford is seeing. Overall, sales in the U.S. were up 4.1% in May compared to year-earlier levels. Those gains came despite the fact that semiconductor chip shortages are hampering production of Ford’s tech-heavy modern vehicles. The company did suffer difficulties in stocking dealers with top-selling trucks like the F-Series pickup line, and it’s unclear whether future production halts could cause those problems to persist.
Yet most promising was Ford’s success in building up demand for EVs. The company delivered almost 2,000 of its Mustang Mach-E electric vehicles in the U.S. and saw considerable sales activity abroad as well. Meanwhile, hybrid versions of its F-150, Escape, and Explorer models are also increasingly popular among consumers.
A big win for GM
General Motors shares also moved sharply higher, rising 5%. That’s a new all-time high for the stock dating back to its emergence from bankruptcy protection and subsequent relisting in 2010.
GM revealed that it expects its first-half results to be significantly better than it had previously anticipated. The company is working hard to increase deliveries to dealers and customers in North America, despite the semiconductor shortages throughout the industry. Specifically, GM will boost production of Silverado and Sierra full-size pickups and Colorado and Canyon mid-size pickups thanks to efficiency measures and dynamic vehicle testing.
That optimism should extend throughout 2021. General Motors is prioritizing deployment of available semiconductor chips to maximize profit, but engineering solutions are also helping to reduce chip use at a crucial time.
Counting GM out of the EV game proved quite premature, and the auto giant is now focused on supporting an all-electric future. Between a battery platform, autonomous vehicles, and other electrification initiatives, General Motors is making its case as a continuing power in the auto industry.
Disruption isn’t always fatal
Many investors saw disruptive small EV start-ups as threatening Ford and GM with extinction. But strong companies fight back against competition, and both General Motors and Ford have regained their footing and have strong prospects to move forward aggressively with EV initiatives that will shape the future of automobiles for decades to come.
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