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Traditional Automakers Are Making The Transition To Electric With These Ambitious EV Plans

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·5 min read
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Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) have both started off the year strong, seeing double-digit gains. GM stock rose 20% from where it started at the beginning of 2021. Ford stock saw similar movement, surging up 35% and then settling at around 23%. Both companies are likely seeing more market attention because of their ambitious EV plans and they are not the only ones who are upping their game in an effort to catch up in the EV race and give Tesla Inc (NASDAQ: TSLA) a run for its money.


The company has enjoyed a soaring stock-market valuation on the back of its EV plans, but this doesn't change the fact that it's lagging behind its peers with product launches. In 2019, GM faced United Auto Workers strike. In 2020, the pandemic forced it to close its plants and in 2021, a shortage of semiconductors. It is a good thing that GM learned something from its 2008 dramatic saga and has been fortifying its balance sheet since, helping it to survive the pandemic with surprisingly little financial trauma. A strong rebound in car demand in its key U.S. market combined with delaying some capital spending also helped. The largest U.S. automaker by sales expects the global microchip shortage to cost between $1.5 billion and $2.5 billion this year.

GM is accelerating investments in electric and driverless vehicles. In January, it revealed it aims to phase out tailpipe emissions from its light-duty vehicles entirely by 2035. The Hummer truck will be the first vehicle to come out from its much-hyped Ultium battery platform, followed by the Cadillac Lyriq in 2022. They both need to measure up very convincingly against the mounting competition, or the days of GM's green halo are numbered.


Ford's all-electric Mustang Mach-E is starting to arrive in dealerships, which will be followed by the firm's first E-Transit commercial van later in the year. The beloved all-electric F-150 pickup is scheduled for release in the mid-2020s. Last Wednesday, the company vowed to phase out gas cars in Europe by 2030 as it revealed it would invest $1 billion in a German factory Cologne. This move is part of a broader plan to nearly double its prior commitment to an electric transition as the legendary automaker plans to invest $22 billion in EVs and an additional $7 billion in autonomous vehicles until 2025. This money will be used to fund the development of Ford's key product lines, including pickup trucks, commercial vans, and SUVs.

The legendary automaker is then preparing to expand its dedicated EV manufacturing capacity around the world, building on its current sites in Michigan (F-150), Missouri (E-Transit), Canada (SUVs), and Mexico and China (Mach-E). In addition, Ford has partnered with Alphabet Inc (NASDAQ: GOOG) to benefit from the tech giant's operating system, apps and services in its EV and autonomous vehicle designs.

The Blue Oval is determined to break constraints, expand battery capacity, get on top of costs and expand its electric vehicles portfolio as its CEO Jim Farley assured investors that "the transformation of Ford is happening."


The sports car manufacturer Porsche Automobile Holding (OTC: POAHY) has announced plans to invest $18.1 billion in the electrification of its vehicles over the next half of a decade. The company predicts that EVs will make up 80% of its sales by the end of the decade. CEO of Porsche Oliver Blume told German newspaper Bild am Sonntag that more than 20,000 units of the fully electric Porsche Taycan were shipped last year with a starting price tag of $97,029.


Volkswagen (OTC: VWAGY) launched its new flagship EV, the ID.3., last year. Half of a decade and nearly $50 billion into the auto industry's biggest bet on electric vehicles, the world's largest carmaker has outspent all rivals in a global bid to challenge Tesla. Volkswagen said it would phase out the production of gasoline-powered vehicles by 2035.


Improving economic outlook, a Brexit deal and its plans to increase its share in its Chinese joint venture from 50% to 75% in 2022 should all fuel BMW (OTC: BMWYY) to regain its pre-pandemic operating margin target in the range between 8% and 10%.

The company is very confident it can make it alone, electric vehicles are expensive to develop and that makes them less profitable. The big investments in EVs require the premium carmaker to simplify its vehicle portfolio. It plans to reduce complexity by reducing engine variants and options for different vehicles, scrapping features customers don't use, plus overhauling software to focus on a simpler and more efficient way of building vehicles. In 2020, BMW's global EV sales rose 31.8% compared to 2019, and this year, BMW plans to double them.


Global EV sales grew by 43% through 2020, despite the impacts of the coronavirus pandemic which shattered traditional car sales. The advantages that these legacy automakers have are their developed supply chains, production knowledge, and economies of scale. But, electric vehicles are more about software than hardware so the rules of the game are entirely different as producing exquisitely engineered ICE cars doesn't translate into being tech-savvy to create an efficient and affordable EV. The only certainty is that change is coming and traditional automakers must move faster. The global transformation of the industry will take roughly a decade, and it will happen with or without these iconic automakers.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com

The post Traditional Automakers Needs Cutting-Edge EVs to Match Their Green Ambitions appeared first on IAM Newswire.

Photo by Jeremy Bishop on Unsplash

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