Ford and GM face quarterly report

General Motors Co (NYSE:GM) and Ford Motor (NYSE:F) Co are expected to report next week that they posted solid earnings for the final quarter of 2021.

The two Detroit automakers are halfway between an internal combustion engine-powered present and a future of electric vehicles and software-driven services.

Both companies have planned multi-billion dollar investments in new North American electric vehicle and battery plants to challenge Tesla (Nasdaq:TSLA) Inc. and a bevy of smaller EV startups in the still tiny market. However, these new factories will not be in full swing until the middle of this decade.

Though GM and Ford were once giants of the global auto sector, their market caps have been dwarfed by EV maker Tesla. Tesla on Wednesday reported higher-than-expected sales and earnings for the fourth quarter of 2021, but warned that supply chain bottlenecks will persist into 2022 and likely prevent its factories from running at full capacity.

GM sold fewer vehicles in the United States than Toyota Motor (NYSE:TM) Corp. last year. It was the first time in 91 years that GM wasn't the No. 1 automaker in its home market.

GM and Ford's 2021 gains were fueled by consumers willing to pay record high prices for petroleum-powered pickups and SUVs. For 2022, analysts fear Detroit manufacturers will face a more uncertain economic environment, including rising interest rates, high oil prices and ongoing supply chain shortages that could impact production.

Analysts expect both companies to remain cautious about their 2022 prospects. Bank of America (NYSE:BAC) said in a statement that semiconductor shortages will weigh on production in the second half of the year.

"While automakers will welcome a recovery in production and inventory builds, they could be accompanied by falling prices, a deterioration in product mix and rising input costs," said Morgan Stanley (NYSE:MS).

Ford told investors in its third-quarter report that it expects $1.5 billion in higher commodity costs and sees inflationary pressures on a wide range of spending.

Wall Street has shown increased confidence in the efforts of Ford CEO Jim Farley in recent months to accelerate the company's electric pickup and van programs. Ford's market value hit $100 billion in mid-January, surpassing GM's for the first time in more than five years. But the market value of Ford, whose quarterly results are expected Thursday afternoon, has since fallen 20% after the company issued a complicated revision to its 2021 earnings guidance.

GM CEO Mary Barra is expected to have a more straightforward story on Tuesday's fourth-quarter and full-year results. GM CFO Paul Jacobson told investors in December that the company expects adjusted pre-tax income of $14 billion for 2021, ahead of previous guidance.