Ford Motor vs. General Motors: Which Automotive Stock Is a Better Buy in 2026?

Sara Appino, The Motley Fool

Sat, September 12, 2026 at 9:27 PM GMT+3 5 min read

As the automotive landscape shifts toward electrification, investors must decide which legacy giant offers the best path forward. Ford Motor (NYSE:F) and General Motors (NYSE:GM) are now racing for dominance in this new era.

Ford is doubling down on its commercial business and iconic truck lineup while navigating a complex transition to electric power. General Motors is leveraging its global scale and proprietary battery technology to defend its market share. Both companies are currently undergoing massive structural changes, making a direct comparison essential for your portfolio.

The case for Ford Motor

Ford Motor focuses on trucks, SUVs, and its Ford Pro commercial vehicle division while operating within the broader universe of consumer discretionary stocks. The company serves retail buyers, government agencies, and rental fleet operators through nearly 8,226 global dealership locations. Its 2025 corporate report indicates that the company employs approximately 171,000 people across its worldwide operations.

In its latest annual report for FY 2025, revenue reached approximately $187.3 billion, representing growth of roughly 1.2% compared to the previous year. However, the company reported a net loss of nearly $8.2 billion, resulting in a net margin of negative 4.4% for the fiscal year. This loss highlights the heavy capital requirements facing the company as it balances traditional combustion engines with new electric designs.

As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 4.7x, which compares total debt to shareholder equity to show borrowing reliance. The current ratio of nearly 1.1x indicates whether the business can cover its short-term liabilities with assets expected to turn into cash within a year. Free cash flow for the year was roughly $12.5 billion, representing the cash generated from operations after paying for capital expenditures like factory updates.

The case for General Motors

General Motors designs vehicles under the Chevrolet, Buick, GMC, and Cadillac brands and manages a network of roughly 10,842 authorized dealership locations. It targets retail and fleet customers, including commercial businesses and daily rental companies, while maintaining strategic joint ventures in China. The company employs over 151,000 people globally to support its manufacturing and engineering efforts.

For FY 2025, the company reported revenue of close to $185.0 billion, representing a slight decline of approximately 1.3% from the prior year. The company achieved a net income of nearly $2.7 billion, which equals a net margin of roughly 1.5% for the year. This profitability remains a key differentiator as the company invests in its next generation of vehicles and realigns its manufacturing capacity.

As of its December 2025 balance sheet, General Motors had a debt-to-equity ratio of about 2.1x, which compares total debt to shareholder equity. The current ratio of nearly 1.2x indicates whether the business can cover its short-term liabilities with liquid assets. Free cash flow reached approximately $11.1 billion, representing the cash remaining after paying for capital expenditures like battery production facilities.

Risk profile comparison

Ford faces significant risks from global supply chain disruptions and shortages of critical raw materials like lithium and cobalt. Ongoing vehicle defects and recall campaigns, including those monitored under a 2024 NHTSA consent order, continue to pose financial and reputational threats. The company also faces challenges realigning its electric vehicle strategy while competing with rivals like Tesla and Toyota Motor.

General Motors deals with high fixed labor costs and manufacturing realignments that limit its flexibility during market downturns. In May 2026, the company settled allegations regarding the collection of driver data, highlighting ongoing cybersecurity and privacy risks. The business also faces numerous class action lawsuits regarding vehicle performance while facing intense competition from rivals like Tesla and Toyota Motor.

Valuation comparison

General Motors currently carries a lower Forward P/E based on future earnings estimates, while Ford offers a lower P/S ratio relative to its annual sales.

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

I'd go with General Motors. Its core business is delivering excellent results, with record quarterly earnings, a raised full-year outlook, and billions returned to shareholders through dividends and buybacks. The truck and SUV franchise is as strong as it has been in years, and the EV business is scaling faster than most investors expected.

Ford, to its credit, raised its full-year outlook after a solid second quarter and achieved the top ranking among mainstream brands in the J.D. Power Initial Quality Study. But Ford has been navigating a complicated restructuring for several years now, and the results keep getting interrupted by unexpected costs. A shortage of aluminum from a key supplier and a large unexpected expense from backing out of a battery plant partnership are the latest examples of a business that has yet to string together the kind of consistent execution that long-term investors look for.

GM is executing cleanly right now, while Ford is navigating too many moving parts to inspire the same confidence. Both companies have the brands and the ambition to compete in the EV era, but GM is doing it from a position of strength that Ford has not yet matched.

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Sara Appino has positions in General Motors and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Ford Motor vs. General Motors: Which Automotive Stock Is a Better Buy in 2026? was originally published by The Motley Fool