GM Stock Value Falls 5 Percent During Week Of May 10 – May 14, 2021

The value of GM stock fell during the May 10^th, 2021 to May 14^th, 2021 timeframe. Shares closed the week at $56.00 per share, which represents a decrease of $2.99 per share, or 5 percent, compared to the previous week’s closing value of $58.99.

Movement & Ranges

By comparison, shares of GM’s cross-town rival, Ford Motor Company, were stable during the same timeframe.

GM Stock Factors

GM stock value fell this week after a 3-percent gain last week and stable performance the week prior.

The recent activity follows a 10-percent gain in March, during which GM stock values crossed the $60-per-share mark, an all-time high for the “new GM,” as well as consistent growth in January that put GM stock value above the $50 per share mark.

The gains seen earlier in April were driven primarily by confirmation of an upcoming all-electric iteration of the popular Chevy Silverado pickup truck. GM stock value hit a record high of $63.44 per share following the announcement.

GM recently reported Q1 2021 earnings, including $3 billion on $32.5 billion in revenue, a 900-percent jump in income and 0.6 percent decrease in revenue compared to Q1 of 2020. GM stated that the earnings were driven by strong price and mix performance in North America, as well as strong credit and residual value performance at GM Financial, and industry recovery in China.

GM previously reported first quarter sales for the 2021 calendar year, with an increase of 4 percent to 642,250 units in the U.S. market. Sales increased at Buick, Cadillac, and GMC brands, while sales decreased at Chevrolet.

Notably, the all-new 2021 Chevy Suburban and Chevy Tahoe dominated their segment in Q1, as did the all-new 2021 Cadillac Escalade.

Previously, General Motors reported fourth-quarter earnings for 2020, beating Wall Street expectations with $1.93 in adjusted earnings per share (versus $1.64 expected) and $37.5 billion in revenue (versus $36.12 billion expected). GM said that it expects to earn between $10 billion and $11 billion in adjusted pretax profits this year, or $4.50 to $5.25 per share.

The Q4 earnings beat 2019’s results, which were impacted by the UAW labor strike.

U.S. GM sales decreased 12 percent during the 2020 calendar year. Fourth-quarter highlights include segment-leading sales for the Chevy Spark, and impressive segment growth for the GMC Canyon pickup.

GM China sales fell 6 percent during the 2020 calendar year to 2,901,102 units, with sales falling for Chevrolet and Baojun brands, and increasing for Buick, Cadillac, and Wuling.

Late in March, it was announced that Meg Whitman and Mark Tatum would join the GM Board of Directors, bringing the total number of members to 13.

General Motors production was cut short by severe winter weather sweeping through the U.S. in February, which cancelled production shifts at facilities in Spring Hill, Tennessee, Arlington, Texas, Bowling Green, Kentucky, and Wentzville, Missouri. The Wentzville facility recently announced it was moving from three production shifts to two.

Production at the GM facility in Silao, Mexico was also curtailed, with GM citing the ongoing natural gas shortage in the region, while production at GM’s facility in Gravatai, Brazil, was cut due to a parts shortage.

Upward momentum in GM stock value was likely further impacted by a global shortage of semiconductor chips, which are required for a multitude of modern automotive electronic systems. The shortage has affected the entirety of the automotive industry.

At the outset of the shortage, GM cut production at four of its facilities, followed by extended production cuts at three of the facilities through April, and another production cut at Lansing Grand River for the remainder of March, the latter of which is expected to affect production of 5,100 units. The production cuts at Lansing were later extended, with reports that production may not restart until late June.

Production cuts were also extended at GM’s Wentzville Assembly plant in Kentucky and CAMI assembly in Ingersoll, Ontario. The Wentzville facility restarted production on April 12^th, while production at the GM Lansing Grand River Assembly plant restarted in May. Production at GM’s Fairfax Assembly in Kansas will be idled until July.

It was recently reported that GM is stockpiling unfinished vehicles waiting for new chips to arrive in a “build-shy” strategy intended to keep production rolling. Additionally, GM is building select units of the 2021 Chevy Silverado 1500 and 2021 GMC Sierra 1500 without certain fuel-saving technologies as a result of the shortage.

It is believed that the microchip shortage could eat into earnings by as much as $2 billion during the 2021 calendar year, with estimates that 80,000 units have been cut from GM’s North American production schedule as a result of the shortage thus far.

President Joe Biden previously announced he is seeking $37 billion in funding to bolster microchip manufacturing in the U.S. and address the shortage. Biden has yet to commit additional funding to the issue. However, Intel recently announced it was in talks to produce chips for automakers. The U.S. Commerce Secretary is set to meet with GM to address the shortage.

More recently, production at the GM San Luis Potosí facility resumed after two months of inactivity due to the worldwide chip shortage. GM also restarted production at Spring Hill one week ahead of schedule.

Further supply chain issues could result from a brewing shortage of natural rubber, although GM says it isn’t worried about it. In further production-related news, a labor dispute at GM’s production facility in Silao, Mexico has prompted a response from senior U.S. lawmakers and the Mexican government.

Interior of GM’s Arlington plant

In February, General Motors unveiled the refreshed 2022 Chevrolet Bolt EV and all-new 2022 Chevrolet Bolt EUV, expanding the automaker’s all-electric offerings.

Much of the upward momentum in GM stock value seen in January is attributed to the automaker’s latest all-electric vehicle efforts, debuts, and strategy, which includes an in-depth presentation released during the Consumer Electronics Show (CES) tech conference. Highlights from the presentation include the launch of BrightDrop, a new business venture aimed at providing last-mile electric delivery solutions, software, and services to delivery and logistics companies.

BrightDrop EP1

The first BrightDrop product to market will be the EP1, an electrically assisted pallet with a 200-pound capacity and adjustable speed up to 3 mph. Following the EP1 will be the EV600, an electrically powered light commercial van incorporating GM’s Ultium batteries and drive motors, offering a max range of 250 miles and a GVWR of just under 10,000 pounds.

GM also unveiled a series of futuristic concepts for the Cadillac luxury brand, including the Cadillac Personal Autonomous Vehicle, a self-driving luxury vehicle, and an autonomous, single-seater helicopter called the Cadillac Vertical Take-Off and Landing Vehicle (VTOL), while also teasing the new Cadillac Celestiq, an upcoming high-end flagship sedan utilizing an all-electric powertrain.

Cadillac dealerships are now preparing for the arrival of the Lyriq and future all-electric Cadillac models with a slew of upgrades. The new Lyriq is expected to enter production at the end of March in the 2022 calendar year.

Earlier in January, GM unveiled its new safety brand, Periscope, which seeks to achieve the automaker’s stated goal of “zero crashes” via vehicle technology development, research, and advocacy. General Motors has also unveiled a new corporate logo that includes lowercase script and a square border with rounded edges. The modernized logo was designed to recognize the automaker’s renewed focus on electric vehicles, as well as its vision for zero crashes, zero emissions, and zero congestion.

GM plans to achieve zero tailpipe emissions by 2035, and reach carbon neutrality by 2040. Kristen Siemen was recently appointed as GM Chief Sustainability Officer, replacing Dane Parker, who took on the position in January of 2020.

GM has announced that it is testing various technologies to reduce battery manufacturing costs, with a focus on reducing reliance on price-sensitive metals like cobalt. Furthermore, GM and LG Chem recently announced a new $2.3 billion battery plant would be constructed in Tennessee, along with a $1 billion investment at the Ramos Arizpe complex in Mexico, set to become GM’s fifth North American plant to manufacture electric vehicles starting in 2023. The UAW qualified the investment in Mexico as a ‘slap in the face’ for American workers and taxpayers.

The release of the new GM corporate logo coincides with a new marketing campaign titled “Everybody In,” which aims to promote GM’s upcoming line of EV models. As part of the new ad campaign, GM featured the new Cadillac Lyriq in an ad played during Super Bowl LV, starring comedian and actor Will Ferrell.

General Motors previously released its Q4 2020 and 2020 calendar year sales figures, with U.S. GM sales increasing 5 percent to 771,323 units. Sales increased at Chevrolet, Cadillac, and GMC, but decreased at Buick. The Q4 results cap a challenging, but impressive year for the automaker as it outperformed the industry average.

“GM outperformed the industry in the quarter and the full year by a significant margin because our manufacturing and supply chain teams and dealers helped keep people safe at work and our launches on track,” said GM executive vice president and president, GM North America, Steve Carlisle, in a press release. “Extraordinary teamwork has set up everyone to succeed in 2021 as the economy continues to recover and we further ramp up truck and SUV production.”

Critically, GM’s full-size pickup line, which includes the Chevy Silverado and GMC Sierra, collectively outsold the Ford F-Series in 2020, with a combined 847,110 units to the 787,422 units reported for the Ford F-Series. GM recently announced a $75 million investment for its transmission plant in Toledo, Ohio, which will build 10-speed automatic transmissions for the Silverado and Sierra.

What’s more, the all-new Chevy Corvette C8 managed to outsell all rivals combined during Q4, with 21,626 units sold in the U.S. market throughout 2020. The new C8 was the fastest-selling car in the U.S. in February of 2021.

GM China sales also increased in Q4, rising 14 percent with 954,323 units. The Q4 figures mark the second increase for GM China in the 2020 calendar year, despite the challenges of the COVID-19 pandemic. Sales increased for Buick, Cadillac, and Wuling brands, but decreased for Chevrolet and Baojun.

GM inventory ran at a low 49-day supply during the month of February.

The new Cadillac Blackwing sedans.

GM’s luxury division, Cadillac, debuted the CT4-V Blackwing and CT5-V Blackwing ultra-high-performance sedans in February. The new Blackwing sedans are hotly anticipated for their extreme levels of performance and refinement. Both models offer enthusiast-oriented specs and equipment. As GM Authority was first to report, preorders for the sedans opened in conjunction with the debut in February, with GM confirming that a $1,000 deposit is required for the first 500 preorders (250 units per model). Preorders have since sold out. Deliveries are expected to ramp up this summer.

New details previously leaked on a pair of upcoming all-electric crossovers which General Motors will build in a partnership with Japanese automaker Honda, including a possible production timeframe and production location. Honda recently announced that it would employ Cruise autonomous vehicles in Japan as part of its up-and-coming autonomous vehicle mobility service (MaaS) businesses.

Late in December, JP Morgan raised the GM stock price target from $53 to $57. Morgan Stanley Analyst Adam Jonas pointed to the automaker’s impressive connected services portfolio, as well as its proprietary semi-autonomous driver technology, Super Cruise. “Just like Tesla monetizes autonomy though its full FSD (full self-driving) product, it seems GM is ready to increase monetization of its own autonomy solution called ‘Super Cruise,'” Jonas said.

All-new 2021 Cadillac Escalade with Super Cruise engaged

On Wednesday, December 23^rd, 2020, General Motors executive vice president and president, North America, Steve Carlisle, executed the sale of 10,217 shares of GM stock, according to a legal filing with the SEC. The shares were sold at an average price of $42.85 for a total value of $437,798.45. Carlisle still owns 65,626 shares in General Motors, valued at roughly $2.8 million. The sale follows a sell-off by GM CEO Mary Barra in November, at which time Barra sold nearly 175,000 shares of GM stock for a total valuation of nearly $7.7 million

In legal news, news of a Takata airbag recall affecting roughly 7 million GM vehicles worldwide likely impeded upward momentum in November of 2020, of which approximately 6 million pickups and SUVs were affected in the U.S. alone.

Additionally, GM was on the receiving end of a class action lawsuit in December that claims the lithium-ion battery packs in the Chevy Bolt EV could pose a fire risk. GM released a fix for the issue at the end of April.

GM was also the target of yet another class-action lawsuit over alleged oil consumption issues with the Gen-IV 5.3L Vortec V8 engine, which was later dismissed. The automaker is already facing other lawsuits regarding the oil consumption issue, two of which were filed in 2020. In December, a lawsuit filed against GM in California alleged the sale of defective infotainment systems.

In November, GM CEO Mary Barra shared the company’s plan to launch a total of 30 new electric vehicles globally by 2025, with a total investment of $7 billion. To put that in perspective, 40 percent of GM’s offerings will be fully electric by the end of 2025, compared to just three percent in 2021. The General also teased its future electric Chevy Silverado pickup truck during the Barclays 2020 Global Automotive Conference live stream event.

GM’s EV plans include the aforementioned BrightDrop EV600 commercial van and Chevrolet EV pickup truck, the GMC Hummer EV as well as the Cadillac Lyriq, the latter of which was revealed in full production guise in April with a starting price under $60,000.

Shortly before the reveal of the all-new GMC Hummer EV pickup truck on October 20^th, GM stock prices rose 6.75 percent to $35.60 per share before continuing on to a weekly high of $38.03 on the morning of Friday, October 23^rd.

In December, it was revealed that GMC now has 10,000 preorders for the new Hummer EV Edition 1 model. The GMC Hummer EV SUV debuted on April 3^rd.

GM stock gained upward momentum following the Hummer EV debut. Share values were also potentially propelled by news that the Wuling Hong Guang Mini EV is the best-selling electric vehicle in China for the months of October through December. The Mini EV sold 33,094 units during November, outselling the Tesla Model 3 and becoming the only EV in China to sell more than 30,000 units in a single month. Another factor worth noting is the expectation that GM shares would see a significant boost if the automaker were to spin-off its electric vehicle business. The recent sales record for Buick in China for the month of November may also be of interest to investors.

Another factor likely impacting GM stock performance previously was the election of Joe Biden as President of the United States, which was accompanied by a shaky and unprecedented transition of power leading to uncertainty in the country and in the stock market, as evidenced by a riot at the U.S. Capitol. In response to the events in D.C., GM announced it was temporarily suspending all political contributions.

It was previously announced that the Biden Administration would ask agencies to revise fuel economy standards set under the Trump Administration. What’s more, Biden announced plans to replace the entire federal fleet with new electric vehicles. The U.S. Energy Secretary has urged for increased mineral mining for EV production, while senators from California have encouraged Biden to set an end date for the sale of new gasoline-powered passenger vehicles. An additional 11 U.S. states have added their voice to the call for a ban on new gasoline vehicle sales. Auto suppliers, however, have indicated they are against a firm end date for gasoline-powered vehicles.

Electric vehicle sales increased 45 percent in the first quarter of 2021.

The greater auto industry, including the UAW workers union and major manufacturers like General Motors, previously called on the President Biden to roll out tax credits and incentives to drive EV sales. The latest is that the Biden Administration plans to roll out a $100 billion plan for new EV rebates.

In further political news, GM has backed a coalition set to roll back import tariffs imposed under President Trump. Additionally, the automaker came out in opposition to proposed Michigan voting laws.

Production of the in-demand C8 Corvette has been an on again, off again affair, with multiple “restarts” for the eighth-generation sports car’s assembly line this year and in 2020. The 2021 Corvette C8 started production on December 11^th, and late in January it was revealed that production would once again be suspended in February due to yet another parts shortage. Another production stoppage was announced for March, but now, production is back up and running. As of late March, GM is no longer accepting new sold orders from dealers for the 2021 Corvette, with orders for the 2022 model year opening in the summer.

In December, the General announced that it was investing further into Yoshi, an on-demand car maintenance startup company. General Motors Ventures also invested in Envisics, a U.K.-based startup developing augmented reality (AR) technology for automotive applications. GM believes the tech may find a place in the automaker’s all-electric vehicles, such as the Cadillac Lyriq.

In further tech news, Microsoft has invested in Cruise, GM’s robo-taxi division, to help commercialize autonomous vehicle technology. Cruise previously announced it is testing fully autonomous vehicles on the streets of San Francisco, as well as plans to deploy robotaxis in Dubai. The company recently announced an additional $2.75 million in funding.

GM also previously announced it was opening a dedicated 3D printing center in Warren, Michigan to explore the technology’s production potential. It also completed construction of the CTC McLaughlin Advanced Technology Track in February. Production resumed last October after it was forced to put the project on hold due to the COVID-19 pandemic. GM also recently announced that construction of a new design center in Warren would soon resume after a two-year delay.

A new round of investments for the GM Factory Zero plant (previously known as Detroit-Hamtramck Assembly) was announced to address road repairs and other infrastructure needs. General Motors announced in November plans to invest between $1 billion and $1.3 billion in the GM Oshawa Assembly plant in order to begin producing the Chevy Silverado and GMC Sierra pickup trucks. In fact, construction work at the facility is already under way and the company is recruiting for various leadership positions at the plant. News that GM would produce trucks at the Oshawa plant has sparked a sense of concern amongst U.S. workers, who are now anxiously anticipating volume reduction at U.S. plants. However, others expect that truck production at Oshawa will be used to expand supply of GM trucks, and that it won’t come at the expense of capacity at other GM truck plants.

Moreover, The General has announced that it’s seeking to add 1,100 new team members to its new Ultium Cells LLC battery production plant in Lordstown, Ohio. The facility will mass-produce Ultium battery cells for use in General Motors’ upcoming range of all-electric vehicles. GM is developing new lithium metal battery technology with SolidEnergy Systems, recently announcing a new joint development agreement with the company. The UAW workers union is seeking to unionize the workforce at the new facility.

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