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The ex-chief of Ford Motor Company (NYSE:F), Mark Fields, recently highlighted the strength of established automakers in the shift to electric vehicles.
What Happened: On a Thursday, Mark Fields, the former CEO of Ford, expressed his views on the current state of the automotive industry during CNBC’s “Last Call”. He emphasized that traditional automakers are well-equipped to navigate the transition to electric vehicles (EVs). His comments come as Detroit’s Big Three—Ford, General Motors Company (NYSE:GM), and Stellantis (NYSE:STLA)—have seen significant gains six months following the United Auto Workers (UAW) strike.
“The market is waking up to the fact that the established automakers are pretty well positioned to ride out the transition to EVs over time,” he said.
He added that the automakers’ stronghold in the internal combustion (ICE) vehicle business, combined with a large installed base, is helping them gain investors’ trust despite high labour costs.
Why It Matters: The automotive industry is pivotal, with EV adoption accelerating and companies facing various challenges. President Joe Biden‘s administration has implemented stringent emissions standards, pushing automakers toward a more rapid transition to EVs. While EV manufacturers have met this with enthusiasm, the UAW has expressed concerns about job protection.
However, a recent analysis by Bernstein highlighted concerns about demand in key markets and slower EV adoption rates. Tesla Inc. (NASDAQ:TSLA) is encountering market and production hurdles, leading to lowered earnings predictions and a bearish sentiment among investors.
Additionally, supply chain issues continue to loom over the industry, with a recent bridge collapse at the Port of Baltimore affecting shipping routes. While Ford and GM anticipate minimal impact, the full effect on the auto business, including Tesla’s European exports, remains uncertain.
As traditional automakers like Ford, GM, and Stellantis adapt to these challenges, their stock performance reflects investor confidence. GM, Stellantis and Ford saw their shares rise, closing at $44.59, $28.99 and $13.06, respectively, suggesting market optimism in their ability to weather the EV transition.
Read Next: Why Is EV Maker Lucid Stock Surging Today?
Images via Shutterstock
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