Important events
Jan 052023
Toyota left in the dust
After losing its title to a rival, General Motors is back on top of the US auto market.- General Motors has retaken its spot as the top US automaker by sales, overtaking its rival Toyota. Asian auto manufacturers were hit hard last year by supply chain disruption, and a shortage of chips needed for vehicle production.
- GM has been able to meet the high demand for its trucks and cars, selling 2.27m vehicles over the course of 2022 for a 2.5% rise in sales YoY. Toyota on the other hand only managed to move 2.1m, and cut its production targets in November last year.
- It may have taken back the crown, but the coming year will be tough for automakers. Despite demand being forecasted to be strong, some experts think that vehicle price hikes made necessary by inflation will put pressure on sales.
Unsplash
Oct 262022
Hoot if you like an earnings beat
Many were dubious heading into GM’s earnings after Ford’s big warning last month, but that just made the massive beat all the more sweet.- General Motors’ third quarter earnings came in higher than expected with EPS of $2.25, strongly beating estimates of $1.88. The company’s revenue was also looking rather rosy at $41.9bn, up from just $26.8bn last year, together with net income that’s seen a 37% increase in the quarter. Hoot hoot.
- The news managed to somewhat assuage fears surrounding the auto industry. Semiconductor availability has been on the up along with an improvement of supply chains, although GM’s CEO Mary Barra said operating conditions remain “challenging”. In less exciting news, the automakers goal of taking over Tesla has taken a back foot as they dial back on their EV sales target.
- The company’s share price has been basking in glory, jumping 2% in early trading yesterday and up by more than 10% since last week on a general market recovery. It’s still got a long journey ahead though, with shares down by almost 40% YTD. With demand for GM products remaining high, the slump might not last long.
Lucid Motors / Lucid Motors official site / Lucid
Jun 142022
Automakers take inflation personally
Automaker investors are on high alert as they watch how the industry is responding to the worsening economy, with GM drifting to new lows.- GM’s stock reversed 7.8% on Monday to sink below its post-bankruptcy IPO price of $33 for the first time since October 2020. The stock has lost 47% this year alone, joined by other automakers like Tesla and Ford, which both lost around 7% on Monday, in suffering from worsening macroeconomic conditions.
- It all comes down to inflation, which seems to be the word of the week considering red-hot data and upcoming rate hikes. Rising costs are already eating into earnings, and it’ll be harder to come across necessary materials – especially semiconductors. Can GM stay on track to produce 25% - 30% more cars this year as planned? Investors don’t seem to think so.
- Obvs the current economy is punching most people in the stomach rn. But car makers are set to feel a harder right hook than most – with prices skyrocketing, people are tightening the purse strings in a big way, and brand new auto purchases tend to be one of the first things to go.
Ethan Currier / Unsplash
Mar 212022
GM turns on Cruise control
General Motors is taking a big bet on its EV efforts, buying full control of self-driving startup Cruise.🔍 Key points:
- GM is going to buy out Softbank’s stake in Cruise for $2.1bn. The Japanese vision fund will exit the company four years after first acquiring a minority stake in the start-up for $2.25bn in 2018.
- It comes just before Softbank was due to pay $1.35bn in a second tranche of investment to help Cruise’s commercial deployment of vehicles – it’s currently rolling out a driverless Robotaxi fleet in San Francisco – which GM will now have to pay for.
- Cruise has been through some CEO drama recently, with former chief Dan Ammann abruptly departing in December following disagreements in strategy with GM CEO Mary Barra. He’s been replaced by Cruise founder Kyle Vogt, who says the company will remain private for the foreseeable future as it focuses on its Robotaxi efforts.
Cruise
Feb 212022
GM gears up for self-drive
General Motors’ auto drive tech unit, Cruise, wants permission to take its self-driving efforts up a gear.Key points:
- GM has asked U.S. regulators for permission to build and deploy its completely self-driving Cruise Origin, which doesn’t have any human controls like braking pedals or steering wheels.
- There’s currently a cap on the number of self-drive vehicles that can be authorized by the NHTSA, though GM and Cruise have urged President Biden to increase the cap to account for how times have changed – the legislation was created about 10 years ago, but efforts to change it have stalled in Congress.
- Cruise’s other big project, Robotaxi, is finding success so far. It opened a Robotaxi service in San Francisco at the start of February, though it’s still waiting for permission to actually charge a fee for the service.
Cruise
Feb 022022
GM hopes ambition is the mother of success
GM is still in a high speed chase for Tesla’s top spot – will its earnings beat and affordable new EV give it the lead?- The stock sped ahead 5% after hours before losing some speed in morning trading following its Q4 report, which topped estimates with EPS of $1.35 despite the ongoing chip shortages, but missed on sales with revenue of $33.58bn.
- Its EV goals were front and center, making up for its revenue miss. It’s accelerating its production goals and will establish a whole new factory for its electric trucks to speed up production amid mounting concerns that its EV plans are too ambitious.
- It wants to be the biggest EV seller in America by 2025. With that goal in mind, it’s releasing a $30k EV next year, and has yet another plug-in truck in production – Tesla (TSLA) is coming short on both those fronts, confirming another Cybertruck delay and postponing plans for a cheaper compact car in its latest earnings.
Silverado Ev Reveal / Unsplash
Jan 262022
GM makes a play for the EV lead
GM puts another $6.6bn into its arsenal in an effort to take the lead in its fight against other EV giants.- GM is investing around $6.6bn in its home state of Michigan with the core goal of boosting its EV production and building a new battery cell plant.
- It’s part of the $35bn the automaker pledged to spend on EVs by 2025, by which point it also plans to have the factory capacity to make over 1m EVs a year.
- The company’s goal is North American EV supremacy and CEO Mary Barra thinks it’ll have it by 2025, but there are a couple of contenders for the spot. GM’s sales will have to overtake both Ford (F) and Tesla (TSLA) – which already made about 1m EVs in 2021.
Jan 052022
Rallying, but not winning
GM joins the convoy of automakers in the green on Tuesday, despite being pushed off the road as the U.S. fan fave.- The stock revved 12% on Tuesday to hit a new all time high after enjoying gains for 10 of the last 11 sessions.
- It’s thanks to investor enthusiasm for its upcoming electric pickup, which is being unveiled on Wednesday. Ford (F) has just doubled production for its latest electric truck, so clearly consumer demand is through the roof.
- It’s not all good news. Toyota (TM) has put an end to GM’s 90-year reign as the most popular automaker in the U.S. – but GM vows it’ll be stealing the crown back this year.
Ford
Dec 172021
Running on empty
GM gets caught in a pileup after its self-driving company loses its leader out of the blue, sinking over 4% in after-hours trading.- Dan Ammann has left Cruise, GM’s San Fran-based autonomous driving branch. He gave up his position as GM President in 2019 to take on the role.
- Cruise is still due to release a robotaxi service in San Francisco as planned, having applied for its commercial license in November – a rollout that had been delayed from 2019.
- Execs of the auto driving industry are struggling to keep up with market expectations for driverless cars. Waymo CEO John Krafcik left his post earlier this year.
Dec 132021
Plant power
GM prices accelerate on the back of some shiny new EV plant plans.- The stock lifted over 6% on Friday to a three-week high, fully recovering from this month’s Omicron-induced sell-off.
- GM is investing over $4bn into two EV projects in Michigan to boost its production capacity. It’s separately considering a $2bn electric overhaul of its Orion plant.
- EV competitors are hot on its heels. Ford (F), Toyota (TM), Volkswagen (VOW3), and other traditional automakers are all trying to become the next Tesla (TSLA) – GM’s CEO Mary Barra thinks it can “absolutely” catch up by 2025.
Clay Banks / Unsplash
Dec 032021
GM switches into production gear
A new EV factory manages to overshadow news of a recall.- GM gained over 5% on Thursday, shrugging off a mass recall of Chevy Bolts and further delays in delivery times.
- Investors were cheering on a new joint venture with South Korea-based Pocso Chemical. The pair will build a North American factory to produce crucial materials for its EVs. It comes as automakers everywhere try to side-step supply shortages.
- The good news keeps coming. GM also raised its 2021 FY guidance from a midpoint of $12.5bn to $14bn thanks to strong demand.
Christian Wiediger / Unsplash
Nov 182021
GM muscles into EV mania
GM drives full speed-ahead towards electrification with a new EV plant, and shares celebrate with a new milestone.- GM hit a new all-time high on Wednesday after gaining 3.2%.
- It just opened its first dedicated EV plant, which even got a visit from President Biden, who just signed a bill that'll inject $7.5bn into the EV industry.
- CEO Mary Barra thinks GM is undervalued after seeing Rivian’s (RIVN) blockbuster IPO and the recent rally in EV stocks – it looks like GM might be getting caught up in the “froth” after-all though.
GM
Oct 282021
Can GM keep up with the big dogs?
General Motors saw its shares sink 5% on Wednesday following its third quarter earnings, which were driven down by the global chip shortage. The company is still feeling confident though, saying it can “absolutely” catch up with the newly-$1 trillion-valued Tesla.Despite topping estimates on both ends, General Motors saw shares lose over 5% in value as investors digested the impact of the global ship shortage. The automaker reported earnings per share of $1.52 on revenues of $26.78 billion (down over 25% year-over-year), compared to expectations of $0.96 in earnings per share on $26.51 billion in revenue. Guidance wise, the company raised its full year per share expectations to between $5.40 and $6.40, up 30%. General Motors CEO Mary Barra said to shareholders that the global chip shortage was at the core of the company’s tough quarter, adding:
It still continues to be somewhat volatile. We are seeing some improvement in the fourth quarter; we expect to see some additional improvement in Q1. Although we think the first half of next year, we’ll still see an impact from the semiconductor shortage. We think it will get better toward the end of the year.
Barra was all optimism on the earnings call despite the shortages, assuring inventors and analysts that plans are in place to make sure the same effects aren’t being felt in the long term. Not only that, but the chief executive is confident enough in the company’s new electric vehicle direction that she thinks GM can “absolutely” catch up to leading EV maker Tesla in U.S. electric vehicle sales. Barra said:
I am very comfortable, because when people get into these vehicles, they are just wowed. So we will be rolling them out and we’re going to just keep working until we have No. 1 market share in EVs.
Analysts had mixed reviews on the earnings report, with Credit Suisse analyst Dan Levy writing:
While the print did not provide the beat or guidance raise some hoped for, and thus could drive a more muted reaction in the stock, we nevertheless see reason to be positive on GM.
General Motors stock lost 5.42% on Wednesday in its biggest one day drop since August.
Oct 112021
Investor day impresses analysts
GM held its long-awaited investor day last Wednesday, detailing its boldest financial target in years, which will see the company bringing in revenues of over $280 billion by 2030 if successful. GM plans on reaching its goal by expanding profits on its combustion vehicles, as well as through the growth of its electric vehicle segment – prices lifted 4.65% on the news. The update has analysts feeling bullish, and on Friday the stock continued its gains with a lift of 3.77% after Credit Suisse analyst Dan Levy reiterated his outperform rating on the stock. The analyst argued that the automaker made a “compelling case” for multiple expansion at this year's investor day.The company ended the week up over 10%, having spent every week in the green since the end of August and lifting 11% in October so far.
Oct 072021
General Motors aims high
General Motors is planning on shifting things up a gear, laying out an extensive revenue expansion plan and taking on Tesla as the EV leader.General Motors is coming for Elon Musk as the automaker takes its EV plans up a notch and announces its ambitious plans to double its annual revenue by 2030. GM held its long-awaited investor day on Wednesday, detailing its boldest financial target in years, which will see the company bringing in revenues of over $280 billion by 2030 if successful. GM plans on reaching its goal by expanding profits on its combustion vehicles, as well as through the growth of its electric vehicle segment.
To that end, the automaker took aim at leading EV maker Tesla (TSLA) by saying that it plans to take the lead in electric car sales in the U.S., and released details on its new $30,000 eclectic sedan – which is $12,000 cheaper than Tesla’s (TSLA) lowest priced car. GM CEO and Chair Mary Barra said:
When you look at all of the investments we’ve been making for five years plus, that’s what positions us today to really be in execution mode,” GM CEO and Chair Mary Barra told reporters during a briefing ahead of the event. “We have great confidence in our ability to grow revenues.
Analysts are optimistic about the update, with Engine No. 1 founder Chris James saying:
We think this is a real opportunity for people to pay attention and look how a company can disrupt itself in an industry going through transition. General Motors is unique in that we think they’re doing the right things.
As a part of its investment into EVs, GM is also working on its Robotaxi efforts, and its Cruise autonomous vehicle unit recently reported that its business is on track to reporting revenues of over $50 billion in the next few years if keeps going at the rate it is.
GM
Jun 182021
It's all about the electric
The competition is heating up in the EV space, and in a bid to keep up, General Motors is upping its spending on EVs to $35 billion over the next few years.There’s no doubt about it, the electric vehicle market is booming nearly as quickly as some of these cars get from 0-60mph, and GM has no intention of getting left in its dust. Global EV sales were up 43% in 2020, and 18 of the world's top 20 vehicle manufacturers have recently announced their foray into the electric side of life. So you can see why GM, which recently had a logo revamp to represent its journey into an all-electric future,is investing in its market stake by upping its spending on electric and autonomous vehicles by 30% to $35 billion by 2025. In fact, GM has one of the most ambitious electrification plans in the auto industry: aiming to only sell EVs by 2035 and to be completely carbon neutral by 2040, so this is a promising step in that direction.
We want to lead in this space. We don’t just want to participate, we want to lead,
said Doug Parks, GM Executive Vice President of Global Product Development in late 2020.
The automaker must be doing something right, as its stock has nearly tripled since its 12-month low last July, and higher profits are what made this not-so-little increase possible. GM also boosted its projected profits for the first half of the year from $5.5 billion to up to $9.5 billion, a rosy outlook that has made space to increase its EV spending plan by about $8 billion. Some of that will also be put towards adding another two lithium cell production plants, which produce EV batteries with more range per charge. That will take its total to four cell production plants (more than any other automaker right now) and keep it well in line with competition.
The announcement comes less than a month after established automaker Ford Motors upped its own spending to more than $30 billion by 2025. Looks like the race is on.
May 062021
GM knocks it out of the park
Despite the semiconductor chip woes that have been plaguing auto companies recently, General Motors (GM) manages to release banging first quarter earnings and gets rewarded with a 6% jump in share price.We’ve all heard by now of the semiconductor shortage that is panicking the U.S. economy and tech companies around the world. Things ain't looking good. However, GM’s quarterly earnings most certainly are, having blown away expectations and laid the ground for a super strong first half. The automaker reported adjusted earnings per share of $2.25 on revenue of $32 billion, compared to expectations of $1.04 in adjusted earnings per share on $32.67 billion in revenue.
Looks like GM is going for the “under-promise, over-deliver” strategy though, and isn’t raising its guidance despite the blowout quarter. Operating profit is still set at $5.5 billion for the first half of the year, even though Q1 saw $4.4 billion of that taken care of already.
Guiding towards the high end of its range, GM expects $10 billion to $11 billion, or $4.50 to $5.25 per share, in adjusted pretax profits; and adjusted automotive free cash flow of $1 billion to $2 billion for 2021. This forecast apparently takes into consideration the worsening chip shortage, the potential damage of which includes a hit of between $1.5 billion and $2 billion to earnings, and a decline of $1.5 billion to $2.5 billion in its free cash flow.
CEO Mary Barra said while the company was likely to see some production downtime in the second quarter, she still expects to have a strong first half.
“The speed and agility of our team are front and center as we move from managing through a pandemic to managing the global semiconductor shortage,”
she said in a letter to shareholders.
“This remains a challenging period for the company as we emerge from 2020, but the team continues to demonstrate its ability to manage complex situations.”
Apr 062021
The EV side of life
General Motors is jumping back onto the EV bandwagon with an electric version of its classic Chevy Silverado pickup, sending prices up 1.47%.GM will electrify its best-selling vehicle, powered by the company’s new EV battery that lets cars run about 400 miles on a full tank – almost 100 miles more than Tesla’s Model 3. The company has been teasing an electric car for a while now, but earlier warned it might not be released until mid-decade, so the latest news came as something of a surprise. GM announced in January that it had set itself the goal of selling all new cars with zero tailpipe emissions by 2035 – making it the first carmaker to establish a specific goal for the end of diesel and petrol vehicle sales. Clearly, they’re not messing about.
The car will be built at “Factory Zero”, the newly rebranded Detroit-Hamtramck plant that is now dedicated to building electric vehicles. The switch is part of a $2.2 billion investment into the plant, which will also play host to the building of the all-electric Hummer SUV and Hummer pickup. The company seems to be keeping up with the curve, and will release its electric Hummer pickup in 2021 – to compete alongside Tesla’s new Cybertruck and EV start-up Rivian’s new electric pick-up truck. By comparison, Ford is slated to release its first foray into EVs only in late 2022.
However, the current semiconductor shortage has been making its mark on automaker production plans for the coming year. A few weeks ago, GM was forced to shut down production at three plants and slow production at a fourth, and said that its 2021 production targets were facing pressures.
Semiconductor supply for the global auto industry remains very fluid.
GM warned.