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In the EV Market, Is the Empire Now Striking Back?

By John Rosevear – Dec 21, 2021 at 11:06AM

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The next round of hot EV stocks could include some of the auto industry's oldest names.

Over the last few years we've spent a lot of time talking about the newcomers to the automotive space, from now-giant Tesla (TSLA 6.24%) to the newer electric vehicle start-ups that have captured investors' attention more recently. 

But is the narrative shifting? In this Motley Fool Live video, recorded on Dec. 9, Industry Focus host Nick Sciple and Motley Fool senior auto specialist John Rosevear note that with major automakers like Ford Motor Company (F 2.52%) and Volkswagen (VWAGY -0.52%) now investing billions to bring high-quality electric vehicles to market, it may be time for investors to focus on the best of the old automakers and how they might still have potential to grow in the electrified, connected, autonomous automotive future. 

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John Rosevear: We talked a little bit about this at the beginning of the program, where we had all the new EV entrants coming to the public markets via SPACs and so forth earlier in the year. We had Tesla's big run-up starting in late 2019 and so on. Now, we're at the "Empire Strikes Back" part of the story, and that the big stories in the EV space are about Ford, and General Motors, and Volkswagen, and Stellantis. Even while some of these smaller companies are making headway and stuff, but it's just, the scale of when a company like Volkswagen pivots to EV is just so massive, that it affects the whole supply chain. Billions of dollars have to be spent before any significant volume is attained, and they've already spent quite a few billion dollars. This stuff that's coming, the Ford Mustang Mach-E came out early this year. I think, some people who were very attached to the idea that Tesla is 10 years ahead of the rest of the industry were perhaps pleasantly surprised, I hope pleasantly surprised, by the fact that the Mach-E is a good EV. It delivers on its range claims, it delivers on its performance claims. It's well-built, and it's nice to drive. No, it doesn't have the Tesla's Supercharger network, but on the other hand, nobody's really upset about the build quality either as we've seen on some Tesla models, particularly in early production. I think, that's the big story. This is the part where we see what people like me have been talking about for several years, which is, here come the big automakers with a whole lot of electric vehicles. This transition is for real.

Nick Sciple: I think, yeah, folks probably underestimating the scale of what this looks like, and also I think, to the things we talked about earlier, how that trickles through the supply chain. Whether that's rare earth materials, or chips, or any of that, we're getting to real scale here now, and this is going to make real impacts in the world.

John Rosevear owns Ford and General Motors. Nick Sciple has no position in any of the stocks mentioned. The Motley Fool owns and recommends Tesla and Volkswagen AG. The Motley Fool has a disclosure policy.

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