GM and Ford Also Benefit from Electric Vehicle Issues

Stock Price Rises 35% This Year... Impact of Large-Scale Investment

Stock Trends of General Motors (Black) and Ford (Yellow)

[Asia Economy Reporter Byunghee Park] The stock prices of U.S. automakers General Motors (GM) and Ford have shown strong performance this year. With electric vehicle maker Tesla's stock price having increased eightfold last year, there are expectations that GM and Ford could also benefit from the electric vehicle trend this year.

According to the Wall Street Journal on the 21st (local time), GM and Ford's stock prices have each risen by 35% so far this year. Ford's stock price is recording its highest monthly increase since April 2009, while GM's stock price has surged to its highest level since its 2010 relisting.

On the 19th, GM announced a strategic partnership with Microsoft (MS) related to its autonomous vehicle business. GM plans to commercialize the autonomous driving services of its subsidiary Cruise using MS's cloud computing service, Azure.

Ford's stock price has been strong recently following the announcement of plans to produce an electric version of the F-150 pickup truck. The F-150 pickup truck is currently Ford's best-selling model. Electric vehicle maker Rivian, in which Ford invested $500 million in 2009, is also a factor behind Ford's stock price strength. Rivian successfully raised $2.65 billion in funding this week.

The WSJ analyzed, "Although GM and Ford have steadily invested in the electric vehicle business, their image as traditional automakers has prevented their stock prices from gaining momentum," and noted that it remains to be seen whether they can fully benefit from the electric vehicle business. The stock price growth of GM and Ford has lagged behind the market returns (S&P 500 index growth) over the past four years.

President Joe Biden, inaugurated on the 20th, announced plans to increase electric vehicle charging stations and support increased electric vehicle purchases. According to Bernstein Research, electric vehicles accounted for 3% of the global automotive market last year, up from 2.6% in 2019, and the market share of electric vehicles is expected to continue rising in the long term. IHS Markit forecasted in a report released last month that global electric vehicle sales will increase by 70% this year.