Ford (NYSE:F) and General Motors (NYSE:GM) are trading at very low prices compared to their P/E.

In this clip from the Industry Focus podcast, Motley Fool analyst Sean O'Reilly and senior auto specialist John Rosevear take a look at why disruption is one of the biggest contributors in the pricing dip. Listen in to find out what big changes are likely headed toward the industry.

A transcript follows the video.

This podcast was recorded on Jun. 16, 2016. 

Sean O'Reilly: John, getting over to the word of the day, which is "disruption" -- is this the reason that you think the market's anticipating these stocks might be cheap?

John Rosevear: I think it's part of the reason a lot of institutional-sized investors are holding their breath. We've got things that have seen as threats to the old way of doing business. Cars have been sold basically the same way for a century now. There are more dealers, there are more financing options, leasing is more prevalent than it was 40 or 50 years ago, when it was very much unknown. But it's the same thing: You go to the franchise dealer, you make a deal, you buy a car, you bring it home. You finance it maybe, or maybe you pay cash. You have insurance. You park it in the garage. You need parking if you drive it to work, all these kinds of things. This has not changed. Well, guess what? There are people looking to change it. A lot of this people are in Silicon Valley.

O'Reilly: We've talked about them a little bit on Industry Focus obviously, but for those who may not be aware, just to provide some context for what we're talking about here today, can we just run down really quick what, just for the layman, what Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Tesla (NASDAQ:TSLA) and Uber have been up to, in like a minute or less.

Rosevear: There are a lot of other companies in the categories with their doing. That's good. We'll just take these as the leaders.

Google, of course, does many experimental, interesting, quirky things. One of the things they've been working on for years is self-driving cars. Autonomous driving technology, the technology that allows the computer to drive the car safely for you. You don't have to touch the steering wheel. They've had the adorable little prototypes running around for a while. We've all seen them. I think they call them the Panda cars or something like that.

O'Reilly: They look like wind-up toys.

Rosevear: They do look like wind-up toys. Apparently, they don't ride very well, I've heard.

O'Reilly: Really? They're not comfortable?

Rosevear: They're just for test. They were made up for Google. They were built by a contractor in Michigan that works with the auto industry, just as test cars for them to drive around their campus and so forth. Google is not going into the car-making business. They have made that clear. They've hired an industry veteran to run the Google Cars unit. What they seem to want to do is either get into ride-hailing with autonomous cars, or partner with one or more automakers to provide their self-driving technology to cars. Of course, automakers view this askance, because they saw what happened to the phone makers who partnered with Android. That's a concern. That they'll just be making the dumb cars, and the personality and the brains and all the data which everybody wants, goes to Google. So they're mindful of that, and there has been some resistance to working with Google in the auto business.

Tesla, of course, is Tesla. People talk about Tesla disrupting the auto business. I have argued for a long time that what Tesla has really done is entered the auto business and that's a hard thing. They deserve a huge amount of credit. Tesla is becoming an automaker. They're fast-growing. They're innovative. They're, of course, making electric cars. But Elon Musk, his famous secret plan boiled down to, "We're going to show the world that electric cars can be awesome and hopefully, push the industry to follow us." He wasn't looking to destroy the industry. He was looking to lead the industry. Love or hate Tesla, that's what they're doing. The acceleration of battery electric vehicles has been greatly accelerated just because of Tesla's very visible success. A lot of companies are working on them. Some more than others. We'll get into how that plays out with Ford and GM in a bit.

The other company you wanted me to talk about was Uber. Uber, along with Lyft and Didi in China and several other big companies around the world, are pioneers of ride-hailing, where you use an app to summon a car. The cars are crowd-sourced. Drivers sign up to drive for Uber. Passengers get the Uber app and hail one of these vehicles. And Uber's system directs the nearest vehicle or whatever to you. The idea is that everybody makes some money out of this. The thought here is that in some places and times, services like Uber will lead people to say, "Hey, I don't really need to own a car anymore."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.