What Are the Big Three Automakers and How Do They Compare Financially?

Detroit’s Big Three automakers—General Motors (GM), Ford, and Stellantis—have long shaped the U.S. automotive industry with their extensive vehicle lineups, manufacturing capabilities, and global reach. While they share a common legacy, each has taken different strategic approaches to remain competitive amid shifting consumer preferences, technological advancements, and economic challenges.

A financial comparison of these automakers reveals key differences in revenue streams, cost structures, profitability, and debt management. Understanding these factors provides insight into how each company is positioned for future growth and stability.

Market Share and Valuation

General Motors, Ford, and Stellantis each hold significant portions of the U.S. auto market, though their shares fluctuate based on consumer demand and competition. GM consistently leads, driven by strong sales from Chevrolet and GMC, particularly in trucks and SUVs. Ford follows closely, with its F-Series trucks remaining the country’s best-selling vehicle line. Stellantis, formed from the merger of Fiat Chrysler and PSA Group, has a smaller share but benefits from the popularity of Jeep and Ram models.

Valuation metrics offer another perspective on financial standing. GM and Ford are publicly traded, with stock prices influenced by earnings and macroeconomic conditions. Stellantis, listed on multiple exchanges, has a different ownership structure with significant European influence. Price-to-earnings (P/E) ratios fluctuate based on profitability and investor sentiment. Historically, Ford’s P/E ratio has been lower than GM’s, reflecting concerns over restructuring and debt levels. Stellantis, benefiting from post-merger efficiencies, has seen its valuation improve.

Enterprise value (EV), which accounts for market capitalization, debt, and cash reserves, provides a broader view of financial health. GM’s EV is bolstered by strong North American operations and investments in electric vehicles. Ford’s valuation is shaped by its push into EVs and software-driven services, while Stellantis’ EV reflects its global footprint and cost-saving initiatives.

Revenue Structure

Vehicle sales remain the primary revenue source for all three automakers, supplemented by financing services, software features, and after-sales operations.

North America is the most profitable region, with trucks and SUVs generating the highest margins. GM benefits from its luxury Cadillac division and high-volume Chevrolet models, while Ford relies on its F-Series trucks and Mustang brand. Stellantis, with Jeep and Ram, has a strong foothold in off-road and performance vehicle markets.

Beyond North America, GM has a significant presence in China through joint ventures, while Stellantis has a stronger European footprint due to legacy brands like Peugeot and Fiat. Ford, though historically active in Europe, has scaled back operations to focus on its most profitable segments.

Financial services contribute significantly to revenue. GM Financial and Ford Credit provide auto loans and leasing options, generating interest income and fees. Stellantis operates a financing division but relies more on external lending partnerships in some markets. These captive finance arms help drive vehicle sales by offering competitive loan terms while providing steady revenue even during downturns.

Subscription-based services and software-enabled features are growing revenue streams. Ford offers BlueCruise, a hands-free driving system available through a paid subscription, while GM provides Super Cruise and is expanding OnStar services. Stellantis is investing in connected car technology to generate recurring revenue through software updates and infotainment subscriptions.

Cost Management Approaches

Managing expenses is critical as these automakers navigate raw material prices, labor agreements, and supply chain disruptions.

Manufacturing costs are a major factor. GM has leaned into automation and modular vehicle platforms to improve efficiency. Ford has prioritized flexible manufacturing, allowing plants to shift between vehicle types based on demand. Stellantis, benefiting from its merger, has consolidated production facilities and standardized components across brands to lower procurement costs.

Labor costs are another challenge, particularly with unionized workforces under the United Auto Workers (UAW). The 2023 UAW negotiations led to significant wage increases, impacting all three automakers. GM and Ford, with larger U.S. manufacturing bases, absorbed higher labor expenses than Stellantis, which has more production in lower-cost regions. To offset rising labor costs, the companies have implemented workforce restructuring and targeted layoffs in non-manufacturing roles.

Raw material expenses, particularly for steel, aluminum, and lithium for EV batteries, remain volatile. GM and Ford have secured long-term supply agreements with mining firms to stabilize costs, while Stellantis has focused on vertical integration, acquiring stakes in battery manufacturers to control pricing. Currency fluctuations also impact material costs, especially for Stellantis, which operates across multiple global markets.

Supply chain management has become increasingly important after disruptions caused by the COVID-19 pandemic and semiconductor shortages. GM has invested in domestic semiconductor production partnerships to reduce reliance on foreign suppliers. Ford has diversified its supplier base, securing multiple sources for critical components. Stellantis has emphasized just-in-time inventory management while stockpiling essential parts to mitigate future shortages.

Profitability Metrics

Earnings performance is a key indicator of financial strength, with net income and operating margin serving as benchmarks. General Motors has consistently delivered strong profitability, aided by disciplined pricing and a focus on high-margin vehicles. Ford, despite its competitive product lineup, has faced earnings fluctuations due to restructuring costs and investment cycles. Stellantis, benefiting from post-merger synergies, has improved profit margins by streamlining operations and reducing redundancies.

Gross margin, which reflects the percentage of revenue retained after direct production costs, highlights differences in cost efficiency. GM has maintained a competitive gross margin, supported by premium pricing on trucks and SUVs. Ford, while generating strong revenue from its best-selling models, has faced margin compression from rising input costs. Stellantis has improved margins by leveraging shared platforms across its global brands, reducing per-unit production expenses.

Return on invested capital (ROIC) measures how efficiently each automaker generates returns from investments in manufacturing, technology, and infrastructure. GM has maintained a strong ROIC through strategic capital allocation, focusing on profitable segments and emerging technologies. Ford has experienced lower returns in certain periods due to heavy investment in electrification and mobility services. Stellantis, by integrating operations across its legacy brands, has enhanced capital efficiency and improved asset utilization.

Debt and Financing

Each automaker balances borrowing with cash reserves to fund operations, invest in new technologies, and navigate economic downturns.

Long-term debt levels provide insight into financial leverage. Ford has historically carried higher debt due to its reliance on Ford Credit, which funds vehicle loans and leases. While this contributes to revenue, it also increases financial obligations. GM, after restructuring during the 2009 financial crisis, has maintained a more conservative debt strategy, focusing on liquidity while funding EV and autonomous vehicle development. Stellantis, formed through the merger of Fiat Chrysler and PSA Group, has worked to optimize its capital structure by reducing redundancies and improving cash flow efficiency.

Interest expenses and credit ratings impact borrowing costs and financial flexibility. Ford and GM maintain investment-grade ratings, though their outlooks fluctuate based on profitability and market conditions. Stellantis, benefiting from a diversified revenue base across multiple regions, has managed to keep borrowing costs stable. Access to capital markets and government incentives for EV production also play a role in shaping their financing strategies, with all three automakers securing funding for battery plants and supply chain investments.