Stocks of Ford $Ford(F)$ and GM$General Motors(GM)$ both remain quite undervalued while Tesla$Tesla Motors(TSLA)$ and Nio$NIO Inc.(NIO)$ remain overvalued. Even incremental progress on the chip shortage dramatically boosts sales for Ford and GM. Demand for vehicles is strong which has contributed to scarcity and led to consumer willingness to pay up for both new and used vehicles. A good chunk of this higher revenue falls directly to the bottom line for the large-scale "legacy" automakers and the strong cash position of consumers (as well as improving credit metrics as unemployment diminishes) strengthens the companies' credit arms. And as GM and Ford continue to demonstrate to analysts their credible visions for buildouts of electric and autonomous vehicles, they can assign the stocks of these companies a bit more of the higher multiple of projected future earnings which Tesla or a startup like Rivian is credited with.
The bottom line? Both Ford and GM are likely to retest their yearly highs around the end of this month during the period when earnings are scheduled to be released. And although GM still has to fully deal with the fallout from the Bolt EV recalls due to battery fires, both of these automakers look like promising investments over the next year.