GM and Ford shares fall after UBS downgrades on expectations for weakening demand

[RickE]

UBS analyst Patrick Hummel wrote in notes to investors Monday that he expects the U.S. automotive industry to be challenging for the foreseeable future following record profit amid low supplies and high demand during the coronavirus pandemic.

He predicted “it will take three to six months for the auto industry to end up in oversupply, which will put an abrupt end to a 3-year phase of unprecedented” pricing power and profit margins for the automakers.

The investment firm downgraded Ford to “sell” from “neutral” and GM to “neutral” from “buy.”

UBS continues to prefer GM over Ford due to its momentum with electric vehicles and fewer problems with production during the third quarter. Hummel said UBS expects a “solid quarter” for GM, which is scheduled to report third-quarter results on Oct. 25.

For those who are thinking of buying the Lightning to flip and make $10 to $15K on it might have to think twice.

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[sotek2345]

I don't get how all of these analysts think GM has more EV momentum than Ford. Besides the Bolt, which they are discontinuing, they are barely selling any!

 

[astricklin]

With pretty much every EV announced having enough reservations to speak for multiple years of production, I honestly don't see Bev supply exceeding demand for many years. For ice vehicles possibly, especially trucks and large SUVs, but not for phevs and bevs. But I'm no 'industry analyst'

 

[Blainestang]

With pretty much every EV announced having enough reservations to speak for multiple years of production, I honestly don't see Bev supply exceeding demand for many years. For ice vehicles possibly, especially trucks and large SUVs, but not for phevs and bevs. But I'm no 'industry analyst'

Yep, the EV sales leader over the next few years will be the answer to this question:

Who can build the most EVs?

 

[GDN]

Yep, the EV sales leader over the next few years will be the answer to this question:

Who can build the most EVs?

And so far that company hasn't been mentioned in this thread.

 

[Regular150]

Oh yes UBS, the same company with Dictators money https://www.occrp.org/en/suisse-sec...wiss-banking-records-reveals-unsavory-clients
and it's own poor outlook Mid and Long-term is really who your going to take advice from?
g
Logistics and Supply issues along with record number of new migrants into the US, 1.2 Million in the last 12 months, means demand for transportation isn't going south anytime soon.

Add to this we as taxpayers paying $7,500 for new EVs and $4,500 in tax credit for used EV's won't fill the demand gap.

Buying to flip however, is risky to say the least.

 

[RickE]

With pretty much every EV announced having enough reservations to speak for multiple years of production, I honestly don't see Bev supply exceeding demand for many years. For ice vehicles possibly, especially trucks and large SUVs, but not for phevs and bevs. But I'm no 'industry analyst'

I disagree. The EV market will also be affected. Reservations do not equal sales. The economy and the tax rebate have changed considerably in the last 6 months and looks to get even worse in the next 6 months. Interest rates on new cars (including EVs) has more than doubled since the Lightning debut in May of 21. The stock market has gone down nearly 20%. The economy is in a recession. A lot of the Lightning reservation were made because of the under $40K price. Now it is $52K for the same exact truck. EV sales were very good because the Federal government was subsidizing them. That has changed with most EV not qualifying for the new law do to all the restrictions imposed.

 

[Blainestang]

I disagree. The EV market will also be affected. Reservations do not equal sales. The economy and the tax rebate have changed considerably in the last 6 months and looks to get even worse in the next 6 months. Interest rates on new cars (including EVs) has more than doubled since the Lightning debut in May of 21. The stock market has gone down nearly 20%. The economy is in a recession. A lot of the Lightning reservation were made because of the under $40K price. Now it is $52K for the same exact truck. EV sales were very good because the Federal government was subsidizing them. That has changed with most EV not qualifying for the new law do to all the restrictions imposed.

EV demand will be affected, but I think demand is so far above supply right now that demand will still exceed supply for a few years for good EVs like the Lightning/Tesla/Rivian/etc. Maybe Ford will have to offer the XLT ER without the $10k forced option package to bring it down to $70k for ER or build more Pros or Tesla will have to make a Model Y SR again, or that kind of thing, but I think production is going to be the primary limiting factor for a while still.

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