- Ride the Lightning
- Ford (NYSE:F) Stock
- The Silverado
- General Motors (NYSE: GM) Stock
- Keep on Trucking
My last article explicitly told you how NOT to invest in the electric truck revolution. Companies like Nikola, Lordstown, and Rivian were three examples of automakers crashing into a ditch.
However, the simple fact is that pickup trucks are one of the world's most popular types of automobiles, and an all-electric version has been the holy grail of the car market for the last few years.
Here are my best bets for success…
Ride the Lightning
I mentioned last time that my dad decided on a Ford Maverick Lariat for his next pickup truck. For the record, my dad is not an “electric car guy”. He also owns a 1970 Chevelle and has chided me for campaigning and voting for Ralph Nader back in 2000 since Mr. Nader made “Unsafe at Any Speed” a rallying call for automotive safety advocates across the country.
He owned a Chevrolet Corvair at the time and wasn’t too keen about Nader telling people what is and is not safe — especially when it came to the car he drove.
(Editor’s Note: Nader’s book resulted in the United States Department of Transportation creation in 1966 and the predecessor agencies of the National Highway Traffic Safety Administration in 1970. He wasn’t asking much, just that cars should have seatbelts and not burst into flames upon a crash.)
So when he told me he was buying a hybrid pickup truck, I was very pleased, but it also served as a lesson in just how popular hybrid and electric pickup trucks have become.
Ford is leading the way with its F-150 Lightning, an all-electric truck.
The Ford F-Series has been the best-selling truck in the U.S. for over 44 years. Even more impressive, the F-Series will hit a 46-year streak this year as the single most popular truck in America and will top 700,000 unit sales for last year alone.
The Lightning delivers almost everything the regular F-150 does in a nearly identical package to its gas-powered brother. Inside and out, the Lightning looks like other F-150s, but it's completely different under the hood. All models come with two electric motors powered by one of two battery packs. With the larger Extended-Range battery, the powertrain makes a whopping 580 horsepower.
It has some serious get-up, as it can hit zero to 60 miles per hour in just four seconds. The estimated driving range is between 230 miles with the base battery to 320 miles with the larger one.
The 2023 Lightning starts at around $53,769 and can stretch well past $90,000 for the Platinum Extended Range model.
With almost 300 options available, car buyers tend to stick with a few vehicles overall. According to Kelley Blue Book, buyers mostly stuck to the top 30 cars, trucks, and SUVs.
That puts the F-150 in a great position to be “the” electric truck going forward.
And one last thing you’ll be quick to notice in your new Lighting: the Mega Powered Frunk!
Yes, the trunk is in the front. It’s waterproof, lockable, and perfect for items you wouldn’t want to store in the bed of a truck overnight. And it’s over 14 cubic feet, which is larger than many sedan trunks out there.
(Editor’s Note: Ford also engineered the F-150 Lightning to serve as a backup generator and says a fully-charged truck can supply up to three days of electricity for the average household in the event of a power outage.)
While deliveries of 2023 the Lightning haven't started yet, order books are now open at dealers nationwide. Ford stopped taking reservations for the 2022 F-150 Lightning earlier this year due to “overwhelming customer demand.”
Ford is aiming to sell 150,000 Lightnings per year starting in 2023. It’s an ambitious goal but seems within the realm of possibility. And one thing I’ll say about Ford, they tend to underpromise and overdeliver. With the Lighting, they have already eclipsed the horsepower, higher payload capacity, and a higher battery range than they initially marketed.
Hopefully that can be said about the stock itself…
Ford (NYSE: F) Stock
Predicting the company’s stock price is a little tricky. Here’s how it’s performed year-to-date:
Much of that fall had to do with supply chain issues and rising interest rates.
Ford had already issued a warning ahead of their third-quarter earnings, citing incomplete vehicles and spiraling costs amid chip and other parts shortages. The company also expects $1 billion more in supply costs than it had foreseen due to inflation.
The company reports those earnings on Thursday, and we could see a dip in the stock price. I believe that the supply chain issues and inflation will eventually begin to let up, and buying the dip on Ford will be a long-term win.
The company also pays a generous 4.8% dividend.
Here’s what investing in Ford would have done over the last 20 years:
That’s a 150% return if you reinvested your dividends.
If you play the long game with legacy stocks like Ford, you can see how they are deftly able to handle occasional rough patches and come out way ahead. They are positioning themselves nicely for the new EV revolution and will stead themselves once all of the supply chain and inflation problems subside.
The Silverado
General Motors (NYSE: GM) reported strong earnings early Tuesday that comfortably third-quarter views, though revenue growth was slightly missed. GM reaffirmed full-year profit guidance. GM stock popped, signaling a move above a key level.
GM’s flagship pickup truck – The Silverado – is also getting the electric treatment starting next year.
It's another cherished pickup, racking up third place in pickup sales behind the F-150 and the Dodge Ram.
GM has announced that it has over 170,000 reservations for the Silverado EV. In their Q3 2022 earnings report, the number of Silverado EV reservations has increased from more than 150,000 in Q2 2022 and from 110,000 in Q1 2022.
Not a bad start…
The company's GMC Sierra EV has already sold out as well. The Denali Edition – priced at $107,000 – is named after the highest mountain peak in North America (one that your editor visited earlier this year) and “is built to tower above everything you thought an electric truck could be.”
GM has also added two lower-priced versions of the electric pickup that start at around $50,000. The Sierra EV Elevation will be available in early 2025, and the Sierra EV AT4 will be available in late 2024.
General Motors (NYSE: GM) Stock
The company aims to deliver 400,000 EVs in North America through 2023, another ambitious goal. But the market seems to line up with their vision, and GM easily beat third-quarter earnings estimates today.
According to FactSet, analysts expected General Motors' earnings per share to rebound 23% to $1.88 on a 57% revenue bounce to $42.086 billion. Instead, GM earnings rebounded 48% to $2.25 per share.
However, revenue landed at 56% to $41.889 billion.
Their trucks division wasn’t the main driver for any of this: Counting Chevy Bolt sales, GM's share of the U.S. EV market doubled to 8% from 4% the prior quarter. GM has also announced an agreement with Hertz Global (NYSE: HTZ) to sell up to 175,000 electric vehicles to the rental company over the next five years.
GM hasn’t been immune to the same market meltdown we’ve seen in the automotive market. Here’s a look at their year-to-date fall:
But just like Ford, GM has all the pieces they need and the shining new electric trucks to boost their revenue for the next few years – especially if the aforementioned supply chain issues
I’m still betting on Ford, but GM is a solid long-term position for any portfolio – especially if you are dollar-cost averaging your positions. While GM only has a meager 1% dividend yield, it’s still something, and the company has the framework to deliver a completely new fleet of high-demand electric trucks for any budget.
Keep on Trucking
Things are looking bright for two of “the big three.” Their legacy of loyalty for their brands is close to unmatched. Also, they aren’t one-trick ponies like Lordstown, Nikola or Rivian – they have plenty of options for auto buyers going forward.
I do have my eye on Tesla (NASDAQ: TSLA), who should be pulling back the curtain on the elephant in the room, the Cybertruck.
I have a feeling that body style isn’t going to appeal to the generations of pickup truck drivers.
However, the Cybertruck is one of the most highly anticipated electric vehicles in history. Tesla vaguely claimed to have a backlog of over one million reservations.
The official timeline for production is not clear. Elon Musk hoped for a “start of production in mid-2023” and “volume production in mid-2023.”
We’ll have to wait and see.
Prototypes of the truck were recently photographed at the Gigafactory in Texas ahead of the start of production.
Elon Musk’s Twitter antics and seeming lack of self-control makes me skeptical about the Cybertruck rollout, but the more I bet against Tesla, the more I’ve learned to regret it.
In the meantime, I’m betting my money on traditional auto companies like Ford and GM to fulfill the incredible desire of electric trucks without completely reinventing the wheel.
Godspeed,
Jimmy Mengel
The Profit Sector
