Cramer says Ford, GM shares are gaining momentum as Tesla slips

CNBC’s Jim Cramer on Monday defended the ownership of shares of two traditional carmakers over riskier, younger competitors as the economy goes into expansion mode and investors focus on trading electric vehicles.

In today’s market environment, where high-growth names are losing strength over last year’s trajectory, Cramer recommended holding shares of Ford and General Motors above Tesla and other EV-led selections. SPAC.

“If you want to bet on electric vehicles with much less risk, I say buy Ford or General Motors,” the “Mad Money” host said. “Despite the bones of the internal combustion engine, they have significant exposure and, just as importantly, adapt to the current moment in a way that Tesla or the SPACs simply don’t.”

According to research by Morgan Stanley, Tesla’s dominance over the U.S. electric vehicle market appears to be waning: domestic electric vehicle sales are increasing as more vehicle manufacturers put their own electric products on the road. The company found that domestic sales of electric vehicles increased 34% in February over the previous year and that Tesla’s market share fell double-digit to 69% over the same period.

Ford and GM have unveiled their own all-electric consumer vehicles and Cramer believes their products will offer a competitive edge.

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

GM wants to launch 30 electric vehicle models by 2025. The Detroit-based manufacturer is also investing heavily in better battery technology, which could help solve the bottleneck of electric vehicle components, Cramer noted. .

“They’re huge, consolidated companies that improve balance sheets and real profits, profits that are skyrocketing right now,” he said.

So far, GM’s market value has increased by 39% and Ford’s has increased by 50%. Tesla, after rising 743% in 2020, is almost equal to the year.

As for Tesla and the many blank check offers: QuantumScape battery company, maker of plug-in hybrid electric vehicles Fisker and Lucid Motors Churchill Capital IV – Cramer link says they have become battlefield and tough stocks to have.

“The honeymoon period for electric vehicle SPACs is over. Even the bonds have been badly affected,” Cramer said. “Now the market is much more skeptical about speculative growth stocks.”

“If you want exposure to electric vehicles, but you don’t want to take the risk of betting on a young growth park, you can stick with what works,” Ford and GM said.

Disclosure: Cramer’s charity trust has shares in Ford.

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