Cramer says Ford, GM shares gain momentum as Tesla slips

CNBC’s Jim Cramer on Monday argued in favor of owning shares of two traditional automakers over younger, riskier competitors as the economy enters boom mode and investors turn to trading in electric vehicles.

In the current market environment where high-growth names are losing momentum from last year, Cramer recommended owning shares in Ford and General Motors rather than Tesla and other picks launched by the craze. EV SPAC.

“If you want to bet on electric vehicles with a lot less risk, I say buy Fords or General Motors,” said the host of “Mad Money”. “Despite their internal combustion engine bones, they have significant exposure and, just as important, they match the current moment in ways that Tesla or the PSPCs just don’t.”

Tesla’s control over the U.S. electric vehicle market appears to be shrinking: Domestic sales of electric vehicles are increasing as more automakers put their own electric products on the road, according to a Morgan Stanley study. The company found that domestic sales of electric vehicles rose 34% in February from a year earlier, and Tesla’s market share declined double-digit to 69% during the same period.

Ford and GM have launched their own fully electric mainstream vehicles, and Cramer believes their products will provide a competitive advantage.

Ford built an electric version of its Mustang, the Mach-E, a rival to Tesla’s Model Y crossover. The company also has an electric F-150 in the pipeline which Cramer says will be a hit among small businesses looking to buy pickup trucks as the economy grows.

GM is looking to get 30 electric vehicle models on the road by 2025. The Detroit-based manufacturer is also investing heavily in better battery technology, which could help solve a bottleneck for electric car components, Cramer noted.

“These are huge, established companies with improving balance sheets and real profits, profits that are skyrocketing right now,” he said.

Since the start of the year, GM’s market value is up 39% and Ford’s by 50%. Tesla, after jumping 743% in 2020, is roughly equal over the year.

As for Tesla and the many blank check offers – battery company QuantumScape, plug-in hybrid electric vehicle maker Fisker and Lucid Motors tie up Churchill Capital IV – Cramer says they have become battlefield stocks and hard to find. own.

“The honeymoon period for electric vehicle PSPCs is over. Even the good guys have been hit hard,” Cramer said. “The market is much more skeptical of speculative growth stocks now.”

“If you want exposure to EVs, but don’t want to take the risk of betting on a junior growth stock, you can stick with what works” at Ford and GM, he said.

Disclosure: Cramer Charitable Trust owns shares of Ford.

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