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Ford vs. General Motors: Same industry, two increasingly distinct companies



They have consistently attempted to outperform each other in new vehicle sales, performance, and styling. GM has gained a competitive advantage in recent years as a result of improved financials and early moves into electric and autonomous vehicles. GM recently reported third-quarter results that, when compared to Ford, were out of this world.

The investment cases for America’s largest automakers are increasingly diverging, as the companies — separated in market value by just $1 billion — have taken different approaches to electric and autonomous vehicles.

GM has been diversifying as much as possible around its emerging battery and self-driving vehicle businesses, in addition to a plan to offer only electric vehicles by 2035. Ford is also moving into EVs while maintaining investments in its traditional businesses. By the end of this decade, Ford expects electric vehicles to account for at least 40% of its global sales.

(In the meantime, both companies continue to rely heavily on traditional sales of high-margin pickups and SUVs, refocusing on the segment and leveraging billions of dollars in profit to fund investments in both autonomous and electric vehicles.)

Wall Street analysts are watching the burgeoning segments to see when, or if, one of Detroit’s automakers can differentiate itself.

Self-sufficient investments

Ford announced late last month that it would close its Argo AI autonomous vehicle unit, citing a lack of confidence in the business and its potential for monetization in the near future.

“It’s become very clear that profitable, fully autonomous vehicles at scale are still a long way off,” Ford’s chief financial officer, John Lawler, told reporters on October 26. “We’ve also come to the conclusion that we don’t have to develop that technology ourselves.”

A day earlier, GM Cruise CEO Kyle Vogt expressed optimism about the company’s robotaxi business, predicting a “rapid scaling phase” with “meaningful revenue” beginning next year.

“We’re seeing increased separation between companies operating commercial driverless services and those that are still stuck in the trough of disillusionment,” Vogt said, almost pre-empting Ford’s announcement that it would dissolve Argo. “What is happening here is that the companies with the best product are pulling ahead and accelerating.”

Cruise recently announced that it was expanding its robotaxi service to cover the majority of San Francisco. It came months after the company commercially launched its self-driving vehicle fleet at night during limited hours.

“GM clearly sees this as a long-term opportunity in which they want to participate,” said Sam Abuelsamid, principal analyst at Guidehouse Insights. “Ford says, ‘We think they’ll get there eventually, but it’ll take a lot longer, and we’ve got other fish to fry right now.'”

Other “fish” for Ford include billions spent on electric vehicles and lower-capability driver-assist technologies like the automaker’s hands-free BlueCruise highway driving system.

Selling and’stuffing’

GM was one of the first automakers to announce billions of dollars in new electric vehicle investments, as well as a target date of 2035 for the end of sales of internal combustion engine vehicles.

However, Ford has easily outsold GM in EV sales, whereas GM prioritizes luxury models with new battery technologies, including $100,000 Hummers and Bolt EVs with older battery technology.

“As with AVs, GM got in early,” Abuelsamid explained. “However, outside of the auto industry, in the technology industry, being first to market is not always a guarantee of long-term success.”

Through the first nine months of this year, Ford sold 41,236 all-electric vehicles, while GM sold 22,830 — the vast majority of which were older Bolt models.

Ford has benefited from an electric vehicle strategy that has allowed it to ramp up production faster than GM and put more vehicles on dealer lots. By “stuffing” battery packs into popular vehicles with traditional gas engines, the company has converted them into electric vehicles.

GM, on the other hand, has developed a dedicated EV architecture. Ford intends to follow suit in the long run, but its short-term strategy has given it a sales advantage, which consumers don’t seem to mind. Ford also continues to manufacture hybrid and plug-in hybrid electric vehicles, which GM has decided not to do with the exception of a potential “electrified” Corvette.

Aside from industry leader Tesla, GM is the only automaker in the United States that produces its own battery cells through a joint venture. The company has announced plans for four joint venture battery plants in the United States, including one in Ohio that began commercial cell production earlier this year.

Ford has similar plans, allocating $5.8 billion to build twin lithium-ion battery plants in central Kentucky through a joint venture with South Korean-based SK, but production won’t begin until 2026.

According to Edward Jones’ Windau, while GM may be ahead of Ford in the short term, others may catch up in the coming years.

“Being able to move forward a little faster is a benefit,” he explained. “It appears that many of the players are, once again, taking a similar approach.”