Ford vs. GM: Same Industry, two increasingly different companies

DETROIT — "Same industry. Two antithetic companies."

That's however influential Morgan Stanley car manufacture expert Adam Jonas precocious described General Motors and Ford Motor — bitter rivals for much than a century.

The 2 person consistently attempted to outgun each different successful sales, show and styling of caller vehicles. GM has gained an borderline successful caller years connected the backmost of amended financials and aboriginal moves into electrical and autonomous vehicles. GM astir precocious reported third-quarter results that, compared to Ford, knocked it retired of the park.

The concern cases for America's largest automakers are progressively diverging arsenic the companies — separated by conscionable $1 cardinal successful marketplace worth — person taken antithetic tacks astir electrical and autonomous vehicles.

GM has been diversifying arsenic overmuch arsenic imaginable astir its emerging artillery and self-driving conveyance businesses alongside a program to exclusively connection electrical vehicles by 2035. Ford is moving into EVs, too, but keeping up investments successful its accepted businesses astatine the aforesaid time. Ford expects astatine slightest 40% of its income globally to beryllium electrical vehicles by the extremity of this decade.

(Both companies proceed to trust heavy connected accepted income of high-margin pickups and SUVs successful the meantime, renewing their absorption connected the conception and leveraging billions of dollars successful nett to pad investments successful some autonomous and electrical vehicles.)

Wall Street analysts accidental they're watching the burgeoning segments for when, oregon if, 1 of the Detroit automakers tin separate itself.

"It's a precise competitory industry, and they each thin to beryllium beauteous accelerated followers from that regard," said Edward Jones expert Jeff Windau. "It becomes hard to truly beryllium differentiated implicit a agelong play of time."

Ford is undergoing wide restructuring arsenic portion of CEO Jim Farley's turnaround plan, called Ford+. Meanwhile, GM cut costs years agone nether CEO Mary Barra.

"GM is decidedly operating successful a higher cogwheel with the large quality successful margins betwixt the 2 companies close now," Morningstar expert David Whiston told CNBC. "GM went done a batch of that symptom already a fewer years before."

GM is speedy to enactment its differences from Ford, and is apt to bash truthful again connected Thursday during an capitalist event. But the connection ne'er seems to instrumentality hold.

Wall Street maintains an mean standing of "overweight" connected some stocks, according to expert reports compiled by FactSet. Both automakers are disconnected much than 30% this twelvemonth amid capitalist concerns that their nett heydays during the coronavirus pandemic are down them successful airy of rising involvement rates, ostentation and recessionary fears.

Both stocks transportation a marketplace headdress of astir $54 cardinal — though GM trades for astir $40 a stock and Ford trades for person to $14 a stock — and commercialized seemingly alongside 1 another.

Late past period Ford announced it would disband its Argo AI autonomous conveyance unit saying it didn't person religion successful the concern oregon its imaginable for monetization successful the foreseeable future.

"It's go precise wide that profitable, afloat autonomous vehicles astatine standard are inactive a agelong mode off," John Lawler, Ford's main fiscal officer, told reporters connected Oct. 26. "We've besides concluded that we don't needfully person to make that exertion ourselves."

A time earlier, GM Cruise CEO Kyle Vogt offered bullish comments astir the maturation of his company's robotaxi business, including a "rapid scaling phase" with "meaningful revenue" starting adjacent year.

"We're seeing accrued separation betwixt the company's operating commercialized driverless services and those that are inactive stuck successful the trough of disillusionment," Vogt said, practically foreshadowing Ford's announcement that it would dissolve Argo. "What's happening present is that the companies with the champion merchandise person pulled up and are accelerating."

Cruise precocious said it was expanding its robotaxi work to screen astir of San Francisco. It came months aft the institution commercially launched its self-driving conveyance fleet during constricted hours astatine night.

"GM intelligibly is looking astatine this arsenic a longer-term accidental that they privation to beryllium portion of," said Sam Abuelsamid, main expert astatine Guidehouse Insights. "Ford is saying, 'We deliberation they'll get determination eventually, but it's going to instrumentality a batch longer, and we person different food to fry close now.'"

Ford's different "fish" see billions spent connected electrical vehicles arsenic good arsenic lower-capability driver-assist technologies specified arsenic the automaker's hands-free BlueCruise road driving system.

GM was among the archetypal automakers to denote billions of dollars successful caller electrical conveyance investments and acceptable a people to end income of interior combustion motor vehicles by 2035.

But Ford has been the 1 easy outselling GM successful EVs, portion GM prioritizes luxury models with its caller artillery technologies, including $100,000-plus Hummers and Bolt EVs with older artillery technology.

"As with AVs, GM jumped successful earlier," Abuelsamid said. "But if you look, for example, beyond the car industry, astatine the exertion industry, being archetypal to marketplace successful the agelong word there's not needfully a warrant that you're going to beryllium successful."

Ford sold 41,236 all-electric models done the archetypal 9 months of this year, portion GM sold 22,830 — a bulk of which were its older Bolt models.

Ford's benefited from an EV strategy that's allowed it to ramp up accumulation faster than GM and get much vehicles connected trader lots. The institution has taken fashionable vehicles with accepted state engines and converted them into electrical vehicles by "stuffing" artillery packs into them.

GM, successful contrast, has built a dedicated EV architecture. Ford plans to travel suit eventually, but it's near-term attack has fixed it a caput commencement successful sales, and consumers don't look to mind. Ford besides continues to nutrient hybrids and plug-in hybrid electrical vehicles, which GM has decided not to bash other than a imaginable "electrified" Corvette.

GM is the lone automaker too industry-leading Tesla producing its ain artillery cells done a associated task successful the U.S. The institution has announced plans for 4 associated task artillery plants successful the U.S., including 1 successful Ohio that started commercialized accumulation of the cells earlier this year.

Ford has akin plans, allocating $5.8 cardinal to physique duplicate lithium-ion artillery plants successful cardinal Kentucky done a associated task with South Korea-based SK, but accumulation isn't expected to commencement until 2026.

Edward Jones' Windau said though GM whitethorn beryllium up of Ford successful the abbreviated term, others could drawback up successful the years ahead.

"Being capable to determination guardant a small faster is an advantage," helium said. "It seems similar a batch of the players are, again, pursuing a akin approach."