When General Motors (GM) fell after peaking at $67.21 last month, few expected a steep drop. The bearish short float is only around 2%. In the electric vehicle space Tesla (TSLA) also fell sharply. Conversely, Ford (F) held up better. What happened?
Ford’s EV push with its F-150 electric and Mach-E is promising. Since the stock is steady, investors should consider both GM and TSLA instead, for different reasons.
GM has a coherent EV strategy that investors will understand. It will start testing the Cruise vehicle on driverless rides. It is investing $7 billion in plants for manufacturing in Michigan. This not only brings 4000 jobs back to the U.S. but increases the battery cell supply for GM. GM will also manufacture EV trucks at those sites.
GM could surpass Tesla in EV sales in three years. Still, that is many years away. Impatient investors may consider holding some Tesla stock after the dip. Its valuations are excessive. It trades at those levels because the EV giant is the first mover in the market. It has superior software, a battery charging network, and manufacturing plants in key geographical areas.
Your Takeaway
GM and TSLA stock are both compelling stocks to consider. GM offers value while Tesla is still a hyper-growth EV company. Few new EV entrants will challenge Tesla’s dominance.
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