According to a recent research study by Morgan Stanley, Ford Motor Company is on pace to outsell General Motors (GM) in the EV market for 2021. The research compares Ford’s EV sales through the first 10 months of this year against GM’s, while noting the latter’s halt to Bolt production.
Both Ford and GM have a longstanding history as household names in the global automotive industry. Especially on US soil where both automakers are headquartered. At one point, they were two of the top three automakers in the world by market share
With a changing of the traditional ICE guard for zero emission EVs, legacy automakers like Ford and GM (some more reluctant than others) pivoted their manufacturing and sales, and vowing for an all-electric future. For instance, both automakers along with Stellantis announced a joint goal of having 40-50% of all vehicles sales be electric by 2030.
Ford really starting taking EV production seriously in 2018, when it announced 16 BEVs to come. The company gained a lot of street cred by electrifying the famed Mustang as the Mach-E , which has quickly become a hot seller around the globe.
It will soon be joined by the highly anticipated Ford F-150 Lightning, which already has over 160,000 reservations and is sold out through at least 2023 by modest calculations.
Not to be outdone, GM helped pave the way early on in EV adoption with the Chevy Volt followed by the Chevy Bolt EV and EUV, some of its best sellers. With the Cadillac Lyriq and GMC Hummer EV on the way, GM is looking to grab its own spotlight from the EV audience… unless it’s an auto show.
Thanks to the Bolt and pretty much the Bolt alone, GM has had a decent chunk of overall EV sales. However, recent recall issues may stymie the auto behemoth before year’s end, giving Ford the opportunity to pass its American competitor.
Morgan Stanley predicts Ford will pass GM in EV sales this year
According to a research report from Morgan Stanley’s Nov 29th 2021 investment letter bylined by Adam Jonas, Billy Kovanis, Evan Silverberg, Grace G Kim and Alexander Zoecklery, Ford is on track to pass GM in BEV sales for 2021. The study cites data from Motor Intelligence this past October, that states Ford has sold 21,703 units of its all-electric Mustang Mach-E through the first 10 months of the fiscal year.
Our forecast and valuation of Ford EVs:
- We forecast Ford’s EV unit sales to reach 150k in FY22 (3.5% of Ford volume), 473k units in FY25 (11.5% of volume) and 1.235mm units by FY30 (33.7% of volume).
- We forecast Ford’s global passenger vehicle BEV volume to surpass GM’s in FY22, while trailing GM modestly longer term.
- We value Ford’s EV/AV and Mobility businesses at nearly $12/share for Ford or roughly 100% of our $12 price target.
Our forecast and valuation of GM EVs:
- We forecast GM’s EV unit sales to reach 114k in FY22 (excluding China mini-vehicle, accounting for 1.7% of GM volume), 600k units in FY25 (9.9% of volume) and 1.845mm units by FY30 (34.8% of volume).
- We value GM’s EV/AV (including Ultium and Cruise) and Connected Services businesses at a combined nearly $88/share for GM ( before SOTP discount) or more than 100% of our $75 price target and over 100% of the current share price.
During that same period, GM sold a combined 24,810 units of the Chevy Bolt (both the EV and EUV). However, Motor Intelligence only reported seven units of the Bolt delivered most recently, which is unfortunately the only GM BEV currently available to customers.
As we’ve reported over the past few months, GM is in the midst of a major recall on the Bolt EVs due to a potential battery fire risk tied to over 140,000 vehicles. As a result, GM has decided to forego Bolt (EV and EUV) production for the remainder of 2021.
Thus, giving Ford a window to play a little catchup. The report states the following hypothetical situation given the data outlined above:
If we assume no more sales of the Chevy Bolt for the remaining 2 months of the year and if we assume the Mustang Mach-E repeats October’s selling rate of 2,848 units for the remaining 2 months of the year, this would put Ford’s total FY21 EV sales at 27,399 units vs. GM at 24,810
Boom! Clean sweep by nearly 3K units right? Well, not so fast. These estimations to not account for any sales of the GMC Hummer EV, which is currently being produced, and is expected to begin deliveries in December.
That being said, this will be the “Edition 1” Hummer EV, which costs over $105,000 before any taxes or fees. We will have to wait to see how many Hummers are sold in 2021, but 3,000+ in its first month of production feels unlikely.
It’s important to note that Morgan Stanley anticipates Ford to hold the EV sales crown over GM through 2022, but predicts the latter will reclaim the lead through 2030.
This is an interesting story to follow as GM holds a big chunk of the overall US market for all autos. Ford’s strategy the last decade or so to divest from some of its marques could help it in the long run, focusing on Ford brand EVs… especially when the Lightning arrives. Sure feels like a winner.
While GM has adopted a similar strategy (RIP Saturn), it still owns and operates a lot more brands of which it has to electrify. At least if it plans to follow through on its “all in” vow to deliver 20 EVs by 2023. The clock is certainly ticking there GM…
Competition breeds innovation, and we need a lot more of that to accelerate EV adoption in the US and beyond. Hopefully GM sees Ford’s taillights and pushes its own pace of EV production, challenging other automakers to do more.
We could realistically see consumers driving around in electric F-150’s and Hummers before the Cybertruck. That’s wild.
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