GM Stock Value Dips 3 Percent During Week Of June 7 – June 11, 20211
The value of GM stock decreased during the June 7th, 2021 to June 11th, 2021 timeframe. Shares closed the week at $61.49 per share, which represents a decrease of $1.88 per share, or 2.97 percent, compared to the previous week’s closing value of $63.37.
Movement & Ranges
By comparison, shares of GM’s cross-town rival, Ford Motor Company, decreased 4.3 percent, or $0.69, during the same timeframe.
GM Stock Factors
GM stock value dipped this week after a healthy 7-percent increase last week and five-percent increase the week prior.
The gains seen last week follow the announcement that efforts to soften the impact of the global microchip shortage worked better than originally expected, with new-vehicle deliveries increasing across the U.S and Canada in addition to upcoming better-than-expected first-half financial results.
GM stock values rose considerably in April, 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, but surpassed the $64 mark earlier this week, setting a new record for the “new GM.”
In recent news, Lordstown Motors indicated it is in need of more capital to build the upcoming all-electric Endurance pickup truck. Lordstown Motors shares fell 16 percent in the wake of the filing. GM owns 7.5 million shares of Class A common stock in Lordstown Motors.
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.
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 impacted further 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 12th, 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, including automatic engine stop-start.
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 nearly 280,000 units have been cut from GM’s production schedule as a result of the shortage thus far.
Going forward, GM hopes to increase vehicle deliveries in the U.S. and Canada as recovery from the microchip shortage continues. As a result, General Motors expects much-improved first-half financial results. The automaker recently indicated that production normalization was expected by the 2022 calendar year.
An emergency funding proposal earmarks $52 billion to support domestic chip production, including funds to support construction of 10 new semiconductor chip plants. The bill recently passed the U.S. Senate.
Additionally, 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. Chevy Equinox production at the CAMI Assembly plant in Ontario will resume mid-June, while production of the Chevy Camaro at the Lansing Grand River Assembly plant in Michigan will resume the penultimate week of June. Production of the GMC Sierra HD Denali is now back at full capacity.
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.
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.
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.
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. However, GM recently said it will support the UAW’s efforts at the new joint venture battery plants.
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.
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. Deliveries to the Japanese market are now underway.
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’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.
In legal news, General Motors was recently hit with a class action lawsuit over oil consumption issues related to the automaker’s 2.4L Ecotec four-cylinder engine.
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. Yet another class-action lawsuit has been filed over alleged deceptive destination freight charges.
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 20th, 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 23rd. The debut of the new Hummer was one of the most-watched reveals in GM history.
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 3rd.
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.
GM has announced its support for emissions reductions put forth in a 2019 agreement between automakers and the state of California.
Electric vehicle sales increased 45 percent in the first quarter of 2021. President Biden recently indicated he is considering a new point-of-sale rebate for EVs.
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 11th, 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. It was announced that production of the 2021 Corvette would be cut short.
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.
In related news, Cruise CEO Dan Ammann wrote a letter to president Joe Biden urging looser safety regulations on AV deployment. What’s more, California recently approved an application for a driverless Cruise car pilot program.
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. Construction of the new Charlotte Technical Center in North Carolina is now underway.
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 it was recently announced that production of the full-size pickups would start in Q4 2021, ahead of schedule.
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.
GM During COVID-19
The coronavirus pandemic initially forced GM to idle production across North America, South America and China. As a result, revenue fell sharply and GM began to rapidly burn through cash. However, GM has since resumed production in China, while GM North American production resumed May 18th, 2020.
GM has taken major steps to get through the COVID-19 pandemic, fortifying its balance sheet by reducing and/or deferring expenses, while also shoring up cash and other forms of liquidity. GM has since repaid over half of the $16 billion borrowed to get through the pandemic.
The General also had to cope with a small number of coronavirus cases at some of its facilities, but no major outbreaks have been officially reported so far. The automaker announced a vaccination distribution plan in December. More recently, GM indicated that workers in Texas will continue to wear masks after the state lifts its current mask mandate. Workers will also be required to wear masks following the recent CDC recommendation revisions. GM also opened a new employee vaccination site at its Factory Zero plant in Michigan, and it announced a reshuffling of its workforce as it preps to re-open its offices this summer.
However, refreshes for several GM vehicles have been delayed, including the Cadillac XT4, Chevrolet Traverse, Chevrolet Equinox, GMC Terrain, and Chevrolet Bolt EV. In fact, the overall launch cadence for several GM products has been pushed back, including the launch of the Cadillac CT4-V Blackwing and CT5-V Blackwing models, as well as the Corvette C8 Z06.
That said, several good things happened for GM in 2020, including market share gains and production increases for the Silverado and the Sierra through the end of 2020, as well as strong Chevrolet Blazer sales and Chevrolet Trailblazer sales. Notably, GMC Sierra inventory is extremely low, and so it Cadillac Escalade supply, as the automaker can’t build enough units to meet strong demand.
Most recently, GM announced that its marketing budget was returning to pre-pandemic levels, in addition to doubling its ad spending with Black-owned media next year, and doubling it again by 2025.
GM Before COVID-19
It’s worth noting that GM stock value has gone up and down since mid-2018, long before coronavirus complications, though shares never dipped to the levels observed in the first quarter of 2020.
For the most part, GM stock was in limbo throughout 2019, seeing a jump in value as a result of overwhelmingly positive Q2 2019 earnings, wherein the automaker outperformed expectations. Prior to the COVID-19 pandemic, several factors negatively impacted GM stock value during 2019, including:
- A UAW labor strike that lasted 40 days, resulting in no vehicles built in the United States during that timeframe. Production was also idled in other countries as a result of supply chain-related issues caused by the UAW strike
- Warning signs of an economic slowdown
- Escalations in a trade war with China
Over the last few years, GM has taken several steps to increase its stock value, including exiting markets where it is unable to turn a profit (such as Europe, South Africa and India), closing plants in various locations around the world, divesting loss-making divisions (such as Opel-Vauxhall), adjusting its business model to prioritize profitability over chasing market-share goals, refocusing the Cadillac luxury brand to increase its share of high-profit automobiles, investing heavily in new-age mobility ventures like electric vehicles and autonomous driving tech, discontinuing unprofitable sedan models (Cruze, Sonic, Volt, Impala, Regal, LaCrosse, XTS, CT6) and closing various plants to focus on more profitable crossovers, SUVs and pickup trucks.
To further minimize activities in unprofitable markets, General Motors also announced its intention to phase out the Holden brand in Australia and New Zealand, in addition to pulling the Chevrolet brand out of Thailand while selling the GM Rayong Manufacturing Complex to Great Wall Motors. GM also ended its Maven car-sharing service program.
Despite these actions, the value of GM stock historically struggled to surpass the $40 mark up until this year, spending most of its time in the $33-$38 range (prior to the COVID-19 pandemic). That was somewhat problematic given the “new GM” Initial Public Offering (IPO) of $33 per share in November 2010, resulting in frustration among investors.
We’ll continue to stay on top of all the latest developments related to GM stock, so be sure to subscribe to GM Authority for ongoing GM stock news and complete GM news coverage.
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Fairly standard for a stock to back off a little, and consolidate after making a large move up, waiting for the next catalyst to make another positive move. Volumes this week were quite low across the market with the exception of a few Meme stocks. I expect GM to make some announcements as we head into July, and stock will make another push upward. Next big milestone is $100B market cap, which we are closing in on, and if GM reports $2B+ in earnings in Q2, that adjusts the trailing year PE ratio to around 8, which is crazy low, even in the auto business. GM would already be over $70 a share if not for the chip shortage and unknowns in the supply chan.