Cramer says Ford’s GM shares are growing more and more as Tesla slips

CNBC’s Jim Cramer said Monday he owns shares in two traditional carmakers, rather than younger and riskier competitors, as the economy enters expansion and investors look to trade in electric vehicles.

In today’s market environment, where high-growth names are losing momentum since last year’s race, Cramer has recommended holding shares in Ford and General Motors, such as Tesla and other selections driven by the EV SPAC madness.

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

Tesla’s demand for the US electric vehicle market appears to be shrinking: domestic sales of electric vehicles are growing as more carmakers put their own electric products on the road, according to research by Morgan Stanley. The company found that domestic sales of electric vehicles increased by 34% in February compared to the previous year and that Tesla’s market share decreased by two figures to 69% in the same period.

Ford and GM have launched their own consumer electric vehicles, and Cramer believes their products will offer a competitive advantage.

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

GM is trying to put 30 electric vehicle models on the road by 2025. The Detroit-based manufacturer is also investing in better battery technology, which could help resolve a deadlock for electric car components, Cramer said. .

“These are huge, well-established companies with improved balance sheets and real gains, gains that are going to grow right now,” he said.

So far, GM’s market value has increased by 39% and Ford’s has increased by 50%. Tesla, after growing by 743% in 2020, is almost even a year.

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

“The honeymoon period for electric vehicle SPACs is over. Even the good ones have been hit hard,” Cramer said. “The market is much more skeptical about speculative growth stocks now.”

“If you want to expose your electric vehicle, but you don’t want to take the risk of betting on a junior growth stock, you can stick with what works,” in Ford and GM, he said.

Disclosure: The Cramer charity holds shares in Ford.

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