The auto business is supposed to be in great shape. A surge in demand has kept dealer lots empty. New cars were in short supply during much of the COVID-19 pandemic because of parts shortages. The average price of a new car sold in America has hit almost $50,000. Dealers no longer have to aggressively offer incentives to bring in buyers. For manufacturers, it is heaven. (These are the best- and worst-built cars in America.)<\/p>\n
So, why have the shares of Ford Motor Co. (NYSE: F) and General Motors Inc. (NYSE: GM) dropped sharply in the past year? The Dow Jones industrial average is up 4%, but shares of the two big American automakers are down by 10%. These companies have two significant problems. They have to support huge legacy gasoline-powered car production. And they are not electric vehicle (EV) companies by any stretch of the imagination.<\/p>\n
Tesla Inc. (NASDAQ: TSLA) has by far the largest share of the EV market in America. It has grown from a startup to a major corporation. It could sell as many as 2 million cars this year. Tesla\u2019s market cap is still tenfold greater than GM\u2019s or Ford\u2019s. Ford and GM have a great deal of catching up to do. And, they not only have to be concerned with Tesla. Every major car company in the world is in the midst of spending tens of billions of dollars for a future they believe will be \u201call electric.\u201d Some estimates are that over half the cars sold in the world in 2030 will be EVs.<\/p>\n \t\t\t\t