WionDrive News Desk 
General Motors (GM) and Ford Motor Company are bracing for tough investor scrutiny as they prepare to report their quarterly results amid concerns about pricing power and ongoing losses in their electric vehicle (EV) segments. GM is set to release its earnings for the July to September period on October 22, while Ford will follow on October 28.
GM CEO Mary Barra recently stated that profit margins for traditional gasoline-powered vehicles have not peaked, and she indicated that EV sales are ramping up. The company’s shares have surged by over a third this year, buoyed by strong sales of gas-powered models and two upward revisions to its annual profit forecast.
In contrast, Ford has faced challenges, including quality issues and substantial losses in its EV operations, leading to an 8% decline in its stock this year. Analysts from Deutsche Bank have warned that Ford may fall short of quarterly expectations, particularly due to excess inventory during the period.
Investor sentiment is clouded by questions about whether consumers will continue to pay high prices for trucks and SUVs, especially amid rising interest rates and broader economic uncertainties. According to a recent report from Cox Automotive, the average listing price for a new vehicle rose 2% month-over-month in October to USD 47,823, but this reflects only a 1% increase from a year ago, suggesting a potential pricing ceiling.
As consumer confidence wavers, automakers have had to lower prices to attract buyers, contrasting sharply with the pricing power they enjoyed in recent years during supply chain constraints. Deutsche Bank Research noted concerns about peak pricing and uncertainties surrounding EV strategies as significant long-term risks.
In response to shifting consumer preferences, both GM and Ford are focusing on higher-margin gasoline-powered models. Ford recently canceled plans for an electric three-row SUV, citing profitability concerns, while GM has slowed its EV production goals.
Investors will also seek insights into how economic conditions are affecting consumer behavior. Jonathan Smoke, Chief Economist at Cox Automotive, highlighted that even with a larger-than-expected interest rate cut by the Federal Reserve in September, auto loan rates and overall vehicle affordability remain challenging. As a result, consumers are increasingly gravitating toward compact crossovers, prioritising lower upkeep costs and better fuel efficiency over larger vehicles.
