Ford Motor Co. (NYSE: F) stock is up 33% this year, and General Motors Co. (NYSE: GM) is 41% higher. The S&P 500 has increased 16% in that time. The two companies were supposed to be losers as they continued to lag behind the wounded Tesla Inc. (NASDAQ: TSLA) in the U.S. electric vehicle (EV) market, and they have the most modest presence in China and the European Union. Tesla may be hurting, but it still has about a 45% EV market share in the United States. GM and Ford are closer to 10% each. In China, the world’s largest EV market, the two U.S. car giants have almost nothing at all.
The “win” for Ford and GM is that they are fossil-fuel kings in a fossil-fuel nation. The EV market has died, thanks mostly to the end of the federal $7,500 EV tax credit. iSeeCars research says that EV sales as a percentage of total U.S. new car sales dropped from 8% in the third quarter to 4% in the fourth quarter. It will stay at that level through 2026, the research firm forecasts.
GM and Ford have spent billions of dollars on EV development, only to find their legacy businesses are extremely healthy. In fact, their lead products are full-sized pickups, symbols of America’s gasoline-loving drivers.
Among the reasons that GM and Ford were wrong about EVs was that buyers still worry about range (at 300 miles for most EVs) and the number of charging stations. Excess tire wear and engines that do not take a full charge in very cold temperatures are also concerns. Some Americans don’t know how EVs work, which is another drawback.
On the other hand, the average price of a gallon of regular gasoline has dropped to $3. One of the selling points for EVs is that they save money on fuel. While that may be true, it is not as true as it was when gas was $5 a gallon, about the same time Russia invaded Ukraine. The world is awash in cheap oil, with prices falling toward $60 a barrel.
Add to the gas argument that there are, by some estimates, 175,000 gas stations in the U.S. (many of which have convenience stores). Filling a car with gas takes 10 minutes. EVs take longer to charge—if people can find a charger.
As a bonus, the dislike many Americans have for Tesla CEO Elon Musk has caused some people who might have bought Tesla cars to stick with combustion engine ones instead.
Gasoline-powered cars are the clear U.S. market winner. So much for gambling on EVs in America.
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