Detroit automakers General Motors Co and Ford Motor Co will try to convince Wall Street when they release first-quarter earnings this week that they will not be dragged into a price war with electric vehicle maker Tesla Inc.
has escalated a strategy of squeezing his company's profit margins to expand sales volume.
GM reports first-quarter results on Wednesday. This month, the automaker signaled an upbeat outlook with its first quarter U.S. sales report, titled "Off to a Great Start." GM's first-quarter U.S. sales rose 18% from a year ago, with sales of high-margin trucks and SUVs leading the way.to cut operating costs by $2 billion by year end. Chief Financial Officer Paul Jacobson told investors this month that 5,000 GM employees people had accepted severance deals.
So far, GM has been slow to ramp up in production of its newest EVs, with just 968 Cadillac Lyriq EVs delivered in the first quarter. In the near term, that could help the company dodge the impact of Tesla's price cuts, J.P. Morgan analyst Ryan Brinkman wrote in a note Monday. "GM and Ford should see drastically better trends in pricing and resulting margin impacts than did Tesla" in the first quarter, Brinkman wrote. However, he added, investors are concerned that "weakness in EV pricing could spread beyond Tesla to other automakers’ electric vehicles and — much more importantly — into the broader market for new vehicles generally."in the U.S.
The company will report results for its Model e electric vehicle business, Ford Blue combustion vehicle operations and Ford Pro commercial vehicle unit. In a briefing last month, Ford signaled its EV unit could lose $3 billion before taxes this year.Joe White is a global automotive correspondent for Reuters, based in Detroit. Joe covers a wide range of auto and transport industry subjects, writes The Auto File, a three-times weekly newsletter about the global auto industry.
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