When automobile prices rose steadily, the high prices deterred consumers from buying vehicles. Yet investors who did not buy Ford Motor (F) or General Motors (GM) missed out on their rallies.
Both firms took massive write-downs as they exited or drastically cut back on electric vehicle development.
GM is investing to stay relevant. It will spend over $5 billion in the next few years. This would offset the impact of tariffs. In addition, it positions GM to run in a stable environment, especially as costs from suppliers moderate.
Ford wrote down $600 million related to pension plans on January 29. It also wrote-off $19.5 billion last December 15, 2025, when it backed off from its EV strategy. That included dropping current Lightning truck production.
F stock is holding on to the $14 range and might be attractive at these levels.
Stellantis (STLA) is the European automobile firm that is not fine. The company trades at a cheap forward P/E of below 9.0 times after losing 26% of its value last week. It is writing off $26 billion, citing weak EV demand. The firm claimed it would focus on a freedom of choice strategy. That would broaden its mix of EVs, hybrids, and gas-powered vehicles.
Stellantis has a flawed business model. It cannot profit from EVs or hybrids as competition from Toyota (TM) worsens. It might need to divest its U.S. brand, Dodge and Jeep, to complete its restructuring.
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