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Ford (F) Vs General Motors (GM): Which Automotive Stock Is A Better Buy?

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Feb 24, 2021 (StockMarket.com via COMTEX) -- Which Of These Automaker Stocks Deserve More Of Your Attention Right Now?

Electric vehicle (EV) stocks have been the poster child of growth stocks on Wall Street since 2020. That's because these EV stocks have made unprecedented gains in 2020. If you have Tesla ( NASDAQ: TSLA ) or Nio ( NYSE: NIO ) in your portfolio, then you would have reaped significant gains. These two companies would likely be in the conversation to be on any investors' list of top EV stocks to buy in the stock market today . There is a good reason for these gains after all as the world shifts towards renewable energy. But today, we are not going to talk about these challengers in the automotive industry. Instead, we are looking at what some might consider legacy players in the automotive space, namely General Motors ( NYSE: GM ) and Ford ( NYSE: F ).

EVs are an important part of meeting global goals on climate change. Investors today looking for top EV stocks to buy no longer need to chase the high price tag of Tesla or Nio. You see, companies like General Motors or Ford are not resting on their laurels when there's innovation taking place in the automotive space. There's no question that EVs are indeed a growing market. And these respectable automakers would inevitably want a piece of it.

Admittedly, the shortage of chips as pointed out by Qualcomm ( NASDAQ: QCOM ) last week may have caused automakers and investors to hold back on the excitement for the EV boom to continue. Such setbacks have left Ford and General Motors with no option but to cut production. However, if we are looking on the bright side, the supply constraint won't last forever. That said, let's take a closer look to see which top automotive stock holds more potential.

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Ford (F) Doubles Investment In EVs

Ford, the automaker that pioneered affordable personal transportation has been in the limelight recently. The company has been grabbing headlines with its new all-electric vehicle, the Mustang Mach-E.

Ford has been working hard to polish its vehicle lineup. If you are a petrolhead, you would have noticed it as well. What's more, Ford has announced a near doubling of its planned investments in EV to $22 billion through 2025.

Last week, the company reported better than expected earnings per share (EPS) by a wide margin. Revenue, however, narrowly missed expectations. On top of its own vehicle line-up, Ford was also an early investor in Rivian Automotive. On January 19, Rivian received a new round of investment funding that valued the company at about $27.6B.

Ford Bets Big With Google Deal

Ford and Alphabet ( NASDAQ: GOOGL ) are entering a six-year deal that will make the tech giant responsible for much of Ford's growing in-vehicle connectivity. This partnership is designed to streamline Ford's operations and accelerate an ongoing $11 billion restructuring plan.

"It's a tremendous opportunity. Bigger than electrification…All the digital capability and conductivity and the digital ecosystem outside of the vehicle are all coming together to a loyalty model, where people will have a much more difficult time switching brands." - Ford CEO Jim Farley

[Read More] 4 Top Software Stocks To Watch In February

General Motors (GM) Is Not Hiding Its Ambitions To Be A Major EV Player

Like Ford, General Motors is another traditional automaker transitioning to electric. For the uninitiated, General Motors has an impressive lineup of EVs. The company's Chevrolet Bolt and Chevrolet Volt are among the best-selling EVs in the US. Both of the models are much more affordable compared to Tesla's models.

The legendary automaker is slated to report its quarterly report early Wednesday. General Motors' profitability shifted into overdrive in the back half of 2020, helping finance an accelerated transition to EVs. So here's the real question, is GM stock a buy ahead of its earnings?

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