Why GM, Ford, Stellantis Are In Reverse Gear In Premarket Today

Legacy automakers such as Stellantis NV STLA, Ford Motor Company F and General Motors Corp. GM were moving lower on fears that Tesla’s price cuts will impact their sales.

What Happened: According to Benzinga Pro data, General Motors was sliding 2.56%, to $37.35, in premarket trading on Friday, Ford was falling 3.20%, to $13, and Stellantis was down 3.68%, to $15.44.

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Tesla, on Friday, sharply cut prices of all its electric vehicle models, sending the stock lower in premarket trading. Automakers are moving in sympathy as the 6.4% to 19.7% reductions announced by Tesla could impact demand for their ICE vehicle lineup.

The lowest price of a Tesla vehicle will be the company’s base Model 3 variant at $46,990. With the $7,500 federal EV subsidy, it could come even cheaper at $36,490. Meanwhile, Ford brand’s average transaction price, excluding that of the Lincoln luxury brand, rose 3.3% month-over-month to $55,943 in December, according to Ford Authority.

As Tesla’s models are now price-competitive with the legacy automakers, it is likely customers will gravitate toward its environment-friendly EVs.