publive-image

Ford has faced challenges with product quality issues and EV losses of billions of dollars dropping its shares by 8%

General Motors and Ford Motor struggles to reassure investors on Detroit's gasoline cars and losses on EV ventures.

General Motors will release results for the period July to September period on Oct. 22. The crosstown rival Ford will report results on October 28.

The report indicates that Detroit's pricing power for gasoline cars is strong while the losses from the EV ventures are decreasing.

Profit Margins for Traditional Gas-Powered Vehicles Not Reached Their Peak: GM CEO

Previously, GM CEO Mary Barra said that the profit margins for traditional gas-powered vehicles have not reached their highest point. The EV sales are rapidly increasing.

GM Shares Increased More Than Third In 2024

The shares of the automakers have increased by more than a third this year as GM raised its annual profit forecast twice. This is attributed to strong sales of gas-powered models.

Ford Faced EV Losses and Product Quality Issues

On the other hand, Ford has faced challenges with product quality issues and EV losses of billions of dollars. This has dropped Ford’s shares by 8% this year.

Analysts from Deutsche Bank said that the automaker might not meet the anticipated targets for the quarter. This may be due to excessive inventory levels.

"Concerns over peak pricing ... as well as uncertainties around EV strategies and penetration, serve as mid- to longer-term overhangs," Deutsche Bank Research said in a note.

According to Cox Automotive's latest report, the average listing price for a new vehicle surged by 2% month-on-month in October to US$47,823. This increase is only a slight rise of about 1% compared to last year. This suggests that prices have reached their peak.

Ford and General Motors Focused on Producing Ford's Maverick pickup and GM's Chevrolet Trax

Both Ford and General Motors are focusing on producing higher-margin gasoline-powered models such as Ford's Maverick pickup and GM's Chevrolet Trax. This shows that EV sales have slowed down.

The Detroit automakers have gained significant market share from struggling rival Stellantis. The sales of Stellantis is lagging in North America.

In August, Ford cancelled its much-anticipated electric three-row SUV, indicating that it could not profitably launch the vehicle.  GM has gone slow on its EV production.