Zinger Key Points
- Elon Musk has built an 'EV castle' and revolutionized automotive industry, says Wedbush's Daniel Ives.
- Between GM and Ford, Ives feels GM has an edge as it has control on its ecosystem because of it proprietary battery platform.
Ford Motor Co. F announced on Monday that it was lowering the Mustang Mach-E electric vehicle prices across trims, which is seen as a reactive move to EV industry leader Tesla Inc.’s TSLA string of price cuts.
What Happened: Tesla’s up to 20% price cuts announced in mid-January kicked off a major EV price war, which has now officially begun, Wedbush analyst Daniel Ives said in a note. Ford’s 6-8% price cuts for its Mustang Mach-E are in response to the Model Y price cuts announced by Tesla, he said.
See Also: Best Electric Vehicle Stocks
The analyst said he expects similar moves over the coming weeks from a host of EV players from Detroit to Germany to China.
Ives, however, is hopeful of Tesla warding off competitive threats. “In this EV arms race, Tesla is uniquely positioned around scale, brand, battery technology, and the Musk DNA while others are aggressively going after market share in this all-out Game of Thrones battle,” he said.
The year 2023 will be a pivotal year that will establish winners and losers, with Tesla on top of the industry, Ives said.
GM Has Edge Over Ford: While General Motors Corp. GM and Ford have both embarked on EV transformation, the former has an edge, given the company has strategically built the Ultium battery platform, the analyst said. This will enable GM to further control its ecosystem and scale a slew of EV models over the coming years, he added.
The analyst said it’s now or never for Ford, GM and others to gain market and mind share. He noted that Tesla and Musk have built the “EV castle” and revolutionized the automotive industry, gaining customers and brand loyalty for their vehicles.
Ford and GM, according to the analyst, will need to sacrifice margins to gain increased volumes at a crucial time. “Ford and GM now are locked in a battle to gain market share against a Musk EV empire that is willing to cut prices and gain massive success with each action,” he said.
Ives said Ford under Jim Farley is making the right strategic moves. He expects GM and Ford to shed more light on their view of price cuts, balancing profits versus volumes on their earnings calls this week.
Price Action: Ford settled Monday’s session down 2.86% at $12.89, according to Benzinga Pro data. GM fell a steeper 4.37% to $36.29 and Tesla plunged 6.32% to $166.66.
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