Joseph White and Paul Lienert

DETROIT (Reuters) – General Motors Co (NYSE) and Ford Motors (NYSE) Co will report next week that they have turned solid profits in the third quarter of 2021. However, investors rarely give less importance to past performances.

Detroit’s two automakers have a mid-leap between an electric-powered future and a present powered by combustion.

They have both mapped multibillion-dollar investments into new North American electric vehicle factories and batteries, with the goal of challenging Tesla Inc (NASDAQ 🙂 Inc) as well as a few smaller EV startups on the tiny market. These factories are not expected to be operational at maximum speed before the middle decade.

EV manufacturer Tesla has eclipsed GM and Ford, once the giants in global automotive industry. Tesla, however, reported Wednesday that it had reported higher than anticipated revenue and profits for its fourth quarter 2021. However they warned that there would be supply-chain problems through 2022 which could stop Tesla’s factories running at their full capacity.

Last year, GM sold fewer cars in America than it did last year. Toyota Motor (NYSE.) Corp. It was the first time since 1991 that GM wasn’t the No. Motor (NYSE:) Corp, the first time in 91 years that GM was not the No. 1 automaker on its domestic market.

GM’s and Ford’s 2021 profits were lifted because consumers are willing to fork out record prices for petrol-powered SUVs and pickup trucks. Analysts are worried that Detroit’s manufacturers may face more uncertainty in the future, with rising interest rates and high oil prices, as well as supply chain bottlenecks, which could limit production.

Both companies are expected to remain cautious about their 2022 outlooks, according to analysts. Bank of America (NYSE 🙂 stated in a note that production will be affected by shortages of semiconductors.

While automakers are expected to enjoy production recovery, inventory restocking and production recovery, these benefits could be coupled with rising input costs, price drops, mixture deterioration, or mix deterioration. Morgan Stanley (NYSE:) said.

Ford informed investors that its third quarter report for the year included $1.5 billion of higher commodity prices and inflationary pressures in a wide range of expenses.

Wall Street seems to have shown greater confidence in the efforts of Ford CEO Jim Farley to increase the speed of the company’s electric pickup trucks and vans programs. Mid-January saw Ford surpass GM in market value, reaching $100 billion. Ford’s market value has fallen by 20%, as its quarterly results are due on Thursday afternoon. This is after Ford complicatedly reworked its 2021 profit guidance.

Mary Barra, Chief Executive of GM, is expected to share a simpler story on Tuesday regarding fourth quarter and full year results. Paul Jacobson, GM’s Chief Financial Officer, told investors that the adjusted pretax profit in 2021 would be $14 billion. This is higher than previously forecasted.