June 28, 2017

Evidence Is Building That Uber/Lyft Will Have Severe Impact On Ford/GM Sales

Ford Car Garage Oxney Road
Michael Trolove [CC BY-SA 2.0], via Wikimedia Commons

EVs have reached commercial stage, but do not sell in sufficient quantities to explain more than a small fraction of the decline. SDVs are not yet deployed at all.

The market is being pressured by a large inventory of used cars which is pushing down prices and demand for new cars.

That inventory has in turn been created by the proliferation of ridesharing services, whose “true ridesharing” services reduce VMTs.

No automaker has yet done enough to respond to this, and its not clear the problem won’t get even worse. I recommend avoiding auto stocks.For a while now, I have been bearish on traditional automotive stocks, owing to what I believe is a fundamental threat posed by ridesharing companies like Uber (Private: UBER ) and Lyft (Private: LYFT ). As I have explained before, the threat is extremely multifaceted. But one of the biggest threats posed stems from the immense potential these companies have to pool riders into fewer cars through “true ridesharing,” reducing the number of vehicles required to satisfy America’s transportation needs.In my opinion, General Motors (NYSE: GM ) and Ford (NYSE: F ) […]

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