The value of GM stock dropped slightly during the week of August 31st to September 3rd, 2021, compared to the stock’s closing value the week before. Shares closed the week at $48.82 per share, representing a decreased of $0.98 or 2 percent compared to the previous week’s closing value of $49.80.
By comparison, shares of GM’s cross-town rival, Ford Motor Company, decreased 3.2 percent, or $0.42, during same timeframe.
GM Stock Factors
GM stock value dropped this week by almost the same amount it increased the week before, which followed several losses the weeks prior.
Some of the factors affecting GM stock value this week include the announcement that production of some of the company’s most profitable vehicles, the Chevrolet Silverado 1500 and GMC Sierra 1500, will be halted for a week due to the ongoing microchip shortage. Production of the Chevy Colorado and GMC Canyon midsize pickups will also be paused, while downtime extensions have been announced for several crossover plants.
As if it couldn’t get any worse, experts are now predicting that the semiconductor crisis could last in 2023. In addition, the most fuel-efficient engine available in GM’s full-size trucks and SUVs, the Duramax turbo-diesel 3.0L LM2 inline-six, has also seen its production come to a halt due to supplier issues. As production of GM’s six-speed automatic transmission winds down, the company announced that it will be laying off workers at its Toledo Transmission Plant.
On the EV front, GM recently indicated that production of the Chevy Bolt EV and Chevy Bolt EUV won’t restart again until the batteries are proven to be defect-free. That isn’t stopping CEO Mary Barra from using a Bolt EUV as her daily driver, as she recently declared during an interview with Bloomberg.
There has been some personnel movement during the last week as well, as Santiago Chamorro was appointed President and CEO of GM South America, replacing Carlos Zarlenga who handed in his resignation the week before. Meanwhile, Marketing Vice President Phil Brooks retired, and was replaced by Molly Peck, who previously served as head of marketing for SAIC-GM in China.
GM Stock Value Macro Factors – Strategy
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.
More recently, GM announced an increase in EV and AV investment, with a whopping $35 billion earmarked between now and 2025. Additionally, GM has announced an investment of $71 million for the new Advanced Design and Technology campus in Pasadena, and a cash infusion for AI vision software company Algolux.
GM Stock Value Macro Factors – Sales
General Motors recently posted a 34-percent sales gain for the Canadian market, as well as a 5-percent increase in China where GM just opened its expanded Advanced Design Center. However, Toyota outsold the General in the U.S. during the second quarter of the year, although by only 577 units.
General Motors also recently released its second-quarter sales, headlined by a 40-percent jump for GM sales in the U.S., with sales increasing for all four of GM’s U.S. brands.
Meanwhile, first quarter sales for the 2021 calendar year included 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.
|Q1 20211||Q4 20201||Q3 20201||Q2 20201||Q1 20201|
|– U. S.||642||771||665||492||618|
|Asia/Pacific, Middle East and Africa2||880||1,082||903||844||605|
- In thousands (000s)
- Total is in GM markets
GM Stock Value Macro Factors – Earnings
GM’s Q2 2021 earnings results were recently released, headlined by $2.8 billion in income on $34.2 billion in revenue. The figures represent a 450-percent jump in income and 103-percent increase in revenue.
Earlier in the year, GM reported its 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 Q1 2021 Earnings SummaryFigures in billions of USD, except for per share amounts and percentages.
|METRIC||Q1 2021||Q1 2020||Q1 2021 - Q1 2020||% CHANGE Q1 2021 / Q1 2020|
|NET INCOME MARGIN||9.3%||0.9%||8.4%||N/A|
|AUTOMOTIVE OPERATING CASH FLOW||-$1.1||$0.3||$-1.40||-311.1%|
|EARNINGS PER SHARE (EPS) DILUTED||$2.03||$0.17||$+1.86||+1094.1%|
|NON GAAP METRICS|
|% EBIT-ADJUSTED MARGIN||13.6%||3.8%||9.8%||N/A|
|ADJUSTED AUTOMOTIVE FREE CASH FLOW||-$1.9||$0.9||$-2.80||-311.1%|
|EPS DILUTED - ADJUSTED||$2.25||$0.62||$+1.63||+262.9%|
|GM NORTH AMERICA EBIT-ADJUSTED||$3.1||$2.2||$+0.90||+40.9%|
|GM NORTH AMERICA EBIT-ADJUSTED MARGIN||12.1%||8.5%||3.6%||N/A|
|GM INTERNATIONAL EBIT-ADJUSTED||$0.3||-$0.6||$+0.90||+150%|
|- CHINA EQUITY INCOME||$0.3||-$0.2||$+0.50||+250%|
|GM FINANCIAL EBT-ADJUSTED||$1.2||$0.2||$+1.00||+500%|
GM Stock Value Macro Factors – Products
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, surpassing the $64 mark the second week of June and setting a new record for the “new GM.”
GM’s luxury division, Cadillac, also 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). The first 2022 Cadillac Blackwing sedans are now arriving at dealers.
Much of the upward momentum in GM stock value seen in January was 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. In late June, GM announced an accelerated timeline for conversion of the GM CAMI Assembly plant in Ingersoll as the all-electric BrightDrop EV600 light commercial vehicle heads towards production.
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 Stock Value Macro Factors – Events
As a result of the ongoing global microchip shortage, General Motors recently announced a slew of production delays at numerous North American facilities, including Lansing Delta Township and Lansing Grand River in Michigan, Ramos Arizpe Assembly and San Luis Potosi Assembly in Mexico, Spring Hill Assembly in Tennessee, and CAMI Assembly in Canada. The delays affect production of numerous models, including the Cadillac XT5, Cadillac XT6, GMC Acadia, Chevy Blazer, Chevy Equinox, GMC Terrain, non-Blackwing Cadillac CT4, and non-Blackwing Cadillac CT5.
GM hopes to keep production lines rolling through the global microchip shortage by removing some features from its full-size SUV lineup. The automaker recently began building the vehicles without the electric steering column lock or wireless phone charger features. Thanks to these efforts, GM’s profitable trucks and SUVs accounted for only one percent of its total production losses.
Nevertheless, General Motors has delayed the launch of its refreshed Silverado 1500 and Sierra 1500 pickups, although GM Authority did reveal that both models will still be sold as 2022 model-year vehicles once they arrive. Previously, the automaker also began production of its highly anticipated Cadillac Blackwing sedans, with the very first CT5-V Blackwing rolling off the line on July 7th.
Despite the setbacks, GM CEO Mary Barra has gone on record as saying the microchip shortage won’t impact GM’s forthcoming EV rollout. GM has also states it is committed to achieving the number one electric vehicle market share in North America.
Earlier this summer, GM stock value saw a healthy 7-percent increase following the announcement that efforts to soften the impact of the global microchip shortage worked better than originally anticipated, with new-vehicle deliveries increasing across the U.S and Canada in addition to upcoming better-than-expected first-half financial results.
Production cuts were extended at GM’s Wentzville Assembly plant in Missouri 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, but idled again shortly thereafter, only to be restarted in June.
It was previously 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. GM’s range of full-size SUVs is also rolling off the line without automatic 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 of May. That figure has risen considerably in the following months.
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. GM is now seeking a long-term supply contract to mitigate the effects of a chip shortage in the future.
In the face of dwindling vehicle inventory, GM Financial has announced it will stop end-of-lease purchases with non-GM dealers, thus prioritizing participating GM dealers with regard to access to vehicles reentering the market.
In further production news, workers at the GM Silao plant in Mexico recently voted to reject an existing bargaining agreement, creating a pathway to unseat the Miguel Trujillo Lopez union currently representing them. The vote follows accusations of voter tampering earlier in the year.
GM Stock Value Micro Factors
GM recently announced that it will replace the battery modules on roughly 50,000 units of the 2017 though 2019 Chevy Bolt EV affected by a potential fire risk. The automaker then decided to extend the battery replacement on all model years of the Bolt EV in addition to the all-new Bolt EUV. The recall is estimated to cost upwards $1.8 billion. Despite the fault laying with battery producer LG Energy Solution, GM CEO Mary Barra announced that GM will continue its relationship with LG going forward.
Several other GM recalls have also been announced in recent months, the most significant of which involves roof rail airbags that could rupture in more than 400,000 units of the Chevy Silverado and GMC Sierra, followed by a block heater cable short circuit issue in some 330,000 units of the Silverado HD and Sierra HD.
In legal news, General Motors and its autonomous vehicle subsidiary, Cruise, is suing Ford over use of the name ‘BlueCruise.’ A class-action lawsuit against General Motors was also allowed to proceed after a motion to dismiss the claim was denied. GM is also facing a new lawsuit alleging fatal air bag failure on multiple models, while another lawsuit was filed over defective airbags and seatbelt pre-tensioners.
In political news, U.S. lawmakers are urging the EPA to reinstate California’s right to set its own vehicle emission rules, while the Biden administration is urging automakers to ensure that their vehicle lineups consist of at least 40 percent EVs by 2030.
Good news recently came out of Asia, as GM Korea recently reached an agreement with workers regarding a wage increase. In America, the greater auto industry, including the UAW workers union and major manufacturers like General Motors, previously called on 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.
Stock Performance Year-To-Date
GM stock value has increased considerably over the past year, only to later rescind some of those gains and fall below the $50-per-share mark.
Some of the biggest gains were seen in January, during which GM stock value peaked around $55 per share, before falling later in the month. In February, GM stock value clawed its way back to the mid-$55 range before falling to $50 per share in early March.
GM stock value saw steady gains throughout the month of March before dipping again later in the month, only to rise to record-breaking heights in early April, once again breaking the $60-per-share mark. GM stock value dipped through the month of May, but reached $64 per share the second week of June, setting a new record for the “new GM.”
GM stock value began to slide around mid-June, dipping below the $60-per-share mark in July. Now, towards the latter half of August, GM stock value has dropped below the $50-per-share mark.