Part 7/10:
Market analysts highlight that legacy automakers like GM and Ford face capital allocation challenges. Morgan Stanley has criticized traditional automakers for being poor capital allocators, often wasting resources on inefficient projects. Given this, GM’s ongoing delays and strategic missteps could be costly, especially if they don't accelerate their EV rollout soon.
In terms of margins, Tesla's gross margins have declined from around 25.5% last year to an expected 22% this year, a decrease within a competitive but manageable range. GM’s margins, however, are significantly lower—around 15%—and are projected to decline further, which some experts see as a sign of financial pressure if the EV transition stalls.