Ford and Tesla market positions on the electric vehicle side are looking pretty good. Due in large part to recent policy developments, Deutsche Bank analyst Edison Yu has rated them two of the “most shielded” automakers. Based on what we know so far about the policy, Ford seems to be in the best shape of all its peers. Of the currently operating companies, Stellantis is the one most at risk today. TD Cowen’s Michaeli called the latest announcements “nearly as bad as the worst case scenario.”
The net effect of these policy changes may result in millions of dollars in extra costs per automaker. The average price tags for Ford and General Motors (GM) vehicles might rise between $4,000 and $5,000 if they successfully mitigate 100% of the cost hike. UBS’ Spak also predicts that automakers will increase prices to compensate for these changes.
The market has mostly preempted the impending regulation and already adjusted to these changes. Since the announcement, Ford’s stock has tumbled more than 3%, while GM shares have crumbled nearly 8%. Stellantis, in spite of its weaknesses, pulled off a much better loss at just over 2%. Bernstein’s Roeska proposed that Stellantis might showcase “relative resilience” in the stark financial fate that awaits other members of the Detroit Three.
Given all of the other challenges slaughtering these auto titans, there’s still a glimmer of hope that the added cost could be completely offset. UBS’ Spak said he thinks it’s realistic that “100% of the cost increase” can be made up. The industry should prepare for further price increases as automakers make their way through these tumultuous shifts.