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Electric Vehicle Checkpoint: Cramer Says to Buy Ford, Tesla, GM Stock

See the latest news for the top stocks in the electric vehicle space including NIO, Lordstown Motors, Li Auto, Plug Power and more.

Jim Cramer turned his attention this past week to the rivalry between Tesla  (TSLA) - Get Tesla Inc Report and Ford  (F) - Get Ford Motor Company Report.

Jefferies analysts upgraded Tesla to buy from neutral and raised their one-year price target to $850 from $700 on expectations that carmakers, in general, will be able to boost their margins as they operate with less but better-allocated capital.

"I think China will be good," Cramer said as he weighed Tesla's prospects. "I think our country will be good and that Europe's good. But the problem is: Will their pickup be as good as Ford's Lightning?"

Over on Real Money, Cramer lists Ford among his bargain stocks, saying, "even amid the hype about overvaluation, you can still find some deals. ... Ford's biggest problem is that it can't make all of the cars and trucks it needs because of a lack of semiconductors, particularly the really inexpensive kind. I think that shortage, ever so slowly, is alleviating itself and a look at the stock of Micron  (MU) - Get Micron Technology, Inc. (MU) Report, which has been a disaster of late, confirms that decision. Ford is just too cheap to ignore."

Ford unveiled its F-150 Lightning in May and the vehicle is at the forefront of the company’s $22 billion global electric vehicle plan. Cramer said that Ford Chief Executive Jim Farley said his vehicle is better than Tesla's.

"He's been critical of the Tesla vehicle," Cramer said. "He thinks it's ugly. A lot of people think it's ugly, but I think it's going to be the only thing I'm worried about for Tesla."

Last month, Ford posted record sales of electric vehicles over the first half of the year, offsetting a 27% slump in total June sales, which were hit by chip shortages and plant closures.

President Joe Biden signed an executive order asking domestic carmakers to have between 40% and 50% of their fleet sales be electric vehicles by the year 2030. The targets form the central plank of Biden's ambitions of investing around $175 billion in clean-energy car infrastructure, including charging stations and tax incentives, in order to spark a change in perception for the American car buyer, who has yet to find electric vehicles nearly as exciting as the media.

"Today, Ford, GM  (GM) - Get General Motors Company (GM) Report and Stellantis announce their shared aspiration to achieve sales of 40-50% of annual U.S. volumes of electric vehicles (battery electric, fuel cell and plug-in hybrid vehicles) by 2030 in order to move the nation closer to a zero-emissions future consistent with Paris climate goals,” the Big Three said in a joint statement. “We look forward to working with the Biden Administration, Congress and state and local governments to enact policies that will enable these ambitious objectives.”

Get more trading strategies and investing insights from Cramer and the other contributors on Real Money.

Tesla founder and CEO Elon Musk lamented the fact that his company was not invited to attend the White House event.

Earlier this spring, Ford pledged to invest at least $30 billion in EVs by 2025, while General Motors is ready to trump that investment by $5 billion. Both U.S. carmakers are aiming to expand battery production and EV model rollouts over the next five years as they chase Tesla's leadership at home and in China, the world's biggest car market.

The pair have a lot of chasing to do -- although electric cars comprise a tiny total of the 14.5 million vehicles sold in the U.S. last year, most were made by Musk's company. Tesla sold just over 200,000 electric cars in the U.S. in 2020, nearly ten times more than GM's best (at least to date) EV option, the Chevy Bolt

"I'm a big Ford EV guy, but I did not understand for a minute why the brilliant Elon Musk was not there. If you want to play, I believe in owning Tesla," said Cramer. He is eyeing Ford, Tesla, PPG  (PPG) - Get PPG Industries, Inc. Report Freeport-McMoRan  (FCX) - Get Freeport-McMoRan, Inc. (FCX) Report and General Motors.

Here is a list of the electric vehicle stocks to watch:

Tesla

Tesla delivered 8,621 China-made cars to the local market in July, down 69% from June amid a string of bad publicity paired with increased local competition from electric-vehicle startups such as NIO  (NIO) - Get NIO Inc. Sponsored ADR Class A Report and Xpeng  (XPEV) - Get Xpeng Report

Cramer told Action Alerts PLUS senior analyst Jeff Marks that before he can make a judgment on the news, he needs to hear a little more from Musk. "One of the things I often find with Elon Musk is you'll make a judgment and it'll turn out there is something you didn't know. He always seems to confound us," Cramer said.

TheStreet Quant Ratings rates Tesla as a Hold with a rating score of C.

Ford Motor

Ford is looking to cut some 1,000 salaried positions in the U.S. through a voluntary buyout program as it tries to realign operations amid its global push to transition to an all-electric car company.

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The move is meant to help the carmaker “match our business priorities with the critical skills needed to turn around our automotive operations” and build more electric vehicles under the Ford+ program, Bloomberg reported, citing an email from a Ford spokesperson.

TheStreet Quant Ratings rates Ford as a Hold with a rating score of B-.

General Motors

General Motors posted weaker-than-expected second-quarter earnings, but lifted its full-year profit guidance, as warranty costs linked to the Chevy Bolt battery recall ate into the carmaker's bottom line.

General Motors said adjusted earnings for the three months ending in December came in at $1.97 per share, up from a loss of 50 cents per share over the same period last year but well shy of the Street consensus of $2.23 per share. GM added that it booked $1.3 billion in warranty recall costs for the quarter, with $800 million linked to the replacement of Chevy Bolt batteries.

TheStreet Quant Ratings rates GM as a Buy with a rating score of B.

Lordstown Motors

Struggling electric truck maker Lordstown Motors  (RIDE) - Get LORDSTOWN MOTORS CORP. Report said that hedge fund YA II PN Ltd has committed to buying up to $400 million of the company's stock over a three-year period. Lordstown Motors disclosed the agreement in a filing with the Securities and Exchange Commission. Under the terms of the deal, YA can receive nearly 35 million Lordstown shares upon execution of the agreement, subject to the approval of Lordstown shareholders, as well as a small discount on the shares whenever purchased.

TheStreet Quant Ratings doesn't have a rating for Lordstown Motors.

NIO

NIO’s deliveries jumped more than 125% to 7,931 vehicles from a year earlier but dipped 1.9% from 8,083 in June.

The company said that by the end of 2025 it planned to add 3,700 battery-swap stations, which would give it 4,000. A swap station is where EV drivers go to quickly exchange their batteries for new ones, rather than waiting for a charge. A typical electric car takes about eight hours to charge from empty to full, according to U.K. charging company Pod Point. The company is making charging stations a priority, Co-Founder and President Qin Lihong told reporters this past week.

TheStreet Quant Ratings rates NIO as a Sell with a rating score of E+.

Li Auto

Li Auto  (LI) - Get Li Auto Report, the Chinese electric vehicle maker, reported second-quarter deliveries more than doubled and topped its estimates. The Beijing company delivered 17,575 vehicles in the quarter, up 166% year over year and nearly 40% from the first quarter. The company had expected to deliver 14,500 to 15,500 vehicles in the second period.

TheStreet Quant Ratings doesn't have a rating for Li Auto.

XPeng

Shares of Chinese electric vehicle maker XPeng rose sharply this past week on strong delivery results. XPeng said deliveries soared 228% to 8,040 in July from last year and were up 22% from 6,565 in June. The July total represented its second consecutive record month. The electric vehicle carmaker delivered 6,054 P7 smart sedans and 1,986 G3 smart compact SUVs. 

XPeng shares have slid 18% over the last six months amid valuation concerns.

TheStreet Quant Ratings has no rating for Xpeng.

Plug Power

Shares of Plug Power  (PLUG) - Get Plug Power Inc. Report were higher after the hydrogen-fuel-cell maker reported second-quarter revenue ahead of estimates and raised its full-year gross-bookings estimates. The company reported a second-quarter net loss of 18 cents a share on revenue of $124.6 million.

Last week, analysts at RBC Capital initiated coverage with an outperform rating and a price target of $42 a share. “Plug Power’s valuation is rich, but its long runway for growth justifies the premium,” analyst Joseph Spak wrote in a research note to clients. The company “offers exposure to the emerging hydrogen economy through its ‘comprehensive turnkey solution," he said.

TheStreet Quant Ratings rates Plug Power as a Sell with a rating score of D.