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General Motors (GM) and Ford (F) to Revolutionize EV Space

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General Motors (GM - Free Report) and Ford Motor Company (F - Free Report) participated in the 2020 Barclays Global Automotive Conference held yesterday.
Amid the heightening climate-change concerns, the automotive industry is transforming and investors are intrigued by automakers that lower their global carbon emissions by providing green transportation solutions. This has made it essential for auto giants, including Toyota (TM - Free Report) , Volkswagen (VWAGY - Free Report) , BMW AG and Honda, to reorient their business model and shift toward manufacturing electric vehicles (EV).  In a bid to stay competitive in the EV race, U.S. auto giants General Motors and Ford are fast changing gears to electric. Both the firms outlined their future plans at the Barclays conference, in order to boost the e-mobility game. While General Motors sports a Zacks Rank #1 (Strong Buy), Ford carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Highlights of Ford’s Presentation

Kumar Galhotra, president of Ford’s Americas and International Markets Group, addressed the Barclays Conference on behalf of the company.

Galhotra updated on key the launches and discussed how Ford’s commercial vehicle ecosystem — highlighted by all-electric versions of the E-Transit van, unveiled on Nov 12,  F-150 battery-enabled pickup truck and the Mustang Mach-E — will yield new forms of value for customers, and fuel Ford’s growth and profitability.

E-Transit is part of Ford’s investment worth more than $11.5 billion for the electrification of vehicles, globally, through 2022. The all-new, all-electric Mustang Mach-E will arrive later this year, while the all-electric F-150 will set foot on the market in mid-2022.

As a part of its EV game plan, Ford is widening the company’s footprint across North America. The company is using state-of-the-art technology to manufacture EVs, which deliver enhanced performance. In North America, Ford is the first full-line carmaker to reveal plans to produce both an all-electric full-size pickup truck and a full-size van for customers — including fleet owners.

The Dearborn-based automaker claims itself to be North America’s commercial truck and van leader, thus, the transition of fleet vehicles to zero emissions is crucial to the company’s goal of achieving carbon neutrality by 2050. Galhotra also emphasized on the enhanced usage of connected-vehicle technology, and data for early identification and resolution of the company’s launch issues.

Ford’s electrification strategy plays to its strengths, and takes leverage of scalability, represented by the company’s spectacular portfolio of Mustang Mach-E crossover, the all-electric F-150 and the new E-Transit, which form part of its first batch of EVs in North America.

Key Takeaways from General Motors’ Address

In the same conference, General Motors announced that it would pump in more funds into its electrification plans and also boost production in order to roll out more electric vehicles sooner than anticipated.
General Motors’ CEO Mary Barra noted that the company plans to expedite the introduction of electric cars and trucks over the next five years. Barra further stated that management anticipates to increase its investment in EVs to $27 billion by 2025 in a bid to accomplish the goal, up from the budget of $20 billion laid out before the COVID-19 pandemic. Further, by 2025, General Motors plans to roll out 30 electric vehicles globally, more than two-thirds of which will be available in North America. The vehicles will encompass the company’s entire brand portfolio, including Cadillac, Buick, GMC, and Chevrolet, in a range of prices.

Earlier the company had announced that it would launch 20 EVs by 2023, most of which were likely to debut in China, where demand for electric vehicles is much higher thanks to the tighter emissions standards.
General Motors has also created a new organization called EV Growth Operations, pioneering on the EV business and hiking customer adoption.
Among the first EV to be rolled out by the auto giant will be the GMC Hummer all-electric pickup, due late next year. The Cadillac Lyriq SUV is now due in the first quarter of 2022, nine months earlier than previously planned.

The line-up of EVs by the automaker will also include an electric pick-up truck and S.U.V. for its Chevrolet brand. General Motors, in fact, teased the electric Chevrolet pick-up truck at the conference by using it as a background prop. Management also plans to add more affordable EV models over time, including the few that will be available in the low-$30,000 range.

In the conference, General Motors also confirmed the development of second-generation Ultium chemistry, which is anticipated to deliver twice the energy density at less than half the cost of the Ultium batteries used in the GMC Hummer EV. The company is prototype testing this next-generation battery technology, anticipated to be available mid-decade.
General Motors has adopted an “all-in” electrification strategy, whereby it will build a competitive advantage in batteries, software, vehicle integration, manufacturing and customer experience in order to make EVs the key to boosting the company’s profitability.

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