"I opened the discussion by admitting that I have reversed my long-standing negative view on Ford and General Motors. Lee immediately agreed, pointing out that GM has been one of the strongest-performing auto stocks this year. The reason is simple. The EV growth narrative has cooled, and the market is refocusing on what actually sells cars in the United States."
"I said it directly. EVs are not going away, but they are no longer on a straight-line path to dominance. After tax credits rolled off in September, EVs fell from about 8% of new car sales to roughly 4.5%. Lee added that Tesla (NASDAQ: TSLA) reported its weakest November sales in several years, confirming that the slowdown is industry-wide. With gas prices low and electricity costs rising, the economics favor gas-powered vehicles and hybrids for most buyers."
"Lee and I agreed that capital spending is rotating away from aggressive EV expansion and toward autonomous driving technology. Ford and GM already have advanced driver-assistance systems on the road, and I believe fully autonomous vehicles could begin appearing within a few years. Beyond convenience, autonomy has a powerful social angle, with the potential to reduce fatalities from drunk, distracted, and fatigued driving."
EV demand has slowed significantly after federal tax credits expired, cutting EV share of new-car sales from about 8% to roughly 4.5%. Tesla reported unusually weak November sales, indicating an industry-wide slowdown. Low gasoline prices and rising electricity costs make gasoline vehicles and hybrids more attractive for many buyers. Capital spending is shifting from aggressive EV expansion toward autonomous driving technology, where Ford and GM already deploy advanced driver-assistance systems and could introduce fully autonomous vehicles within a few years. Strong cash flow and dividend yields, especially Ford's, now provide investor support and downside protection.
Read at 24/7 Wall St.
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