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In the recently released Q3 earnings results, Ford reported $2.4b in net income and 6.4% net income margin, on revenue of $37.5b.
The increased difficulty in meeting heightened demand for electric vehicles has resulted in Ford Motor Co (NYSE: F), General Motors Co (NYSE: GM) hiking prices of their respective popular EV models. According to a post by news outlet Reuters, both automakers warned investors that the cost pressures on consumers will spill over to 2022.
A global semiconductor chip shortage has gripped most automakers and electronics companies including Apple’s production of its latest iPhone 13. Ford customers should expect prices for Ford F-150, and Cadillac Escalade to rise as the company stabilizes the issues with the supply chain market.
The cost of raw materials and production to the final unit has been significantly hampered by the Coronavirus crisis that has sustained the better part of 2020 and 2021. Notably, analysts are worried the effects might continue into next year until such a time when herd immunity guarantees normalcy in our society.
The average price for a General Motors vehicle was more than $47k during the third quarter of 2021. Worse enough, the continued inflation of the global economy caused Ford to raise the prices for its vehicles in North America by approximately $3,500 per unit.
Ford, General Motors, Tesla and the EV Market
In the recently released Q3 earnings results, Ford reported $2.4 billion in net income and 6.4% net income margin, on revenue of $37.5 billion.
Worth noting, Ford told investors that they should expect positive full-year 2020 adjusted EBIT, including fourth-quarter adjusted EBIT between break-even and a $500 million loss.
“We know that there’s huge value to be unlocked as we turn around our automotive operations,” said Jim Farley, Ford’s president, and CEO. “There will be additional opportunities when we start growing again, which we will do with products and services customers can’t resist.”
General Motors on the other hand recorded adjusted earnings per share of $1.52 on revenue of $26.78 billion. The company is, however, heavily invested in depending on its other business units to fund its future.
“Our third-quarter 2021 results clearly illustrate the strength of the underlying business that is funding our future, especially when you put them in the context of the calendar year,” GM CEO and Chair Mary Barra said Wednesday in a letter to shareholders.
Notably, both companies are facing fierce competition from Tesla Inc (NASDAQ: TSLA). Although Tesla through its CEO Elon Musk has cited the Biden administration as not the most friendly with its relation. Musk revealed during a recent interview that the White House invited other companies including Ford and GM but left Tesla out of an EV conference.
Notably, Tesla recently hit and surpassed the $1 trillion market cap after reporting a strong quarter and huge demand in the foreseeable future.
Ford stock and General Motors shares are up 9.54%, and 1.42% in Thursday’s premarket.