GM recently released its Q2 2022 earnings, which were headlined by $1.7 billion in income on $35.8 billion in revenue, as GM Authority covered previously. In presenting the results, GM also outlined what makes the automaker a good investment opportunity.
In a presentation released in conjunction with the Q2 2022 earnings report, GM highlights four key areas that make it a good investment, arguing that short-term challenges have not impacted the company’s strategic long-term growth opportunities.
A key component in GM’s strategy is the implementation of new all-electric platforms and technologies, including the GM Ultium battery and GM Ultium drive motor tech, both of which will enable The General to launch high-volume EV products in a variety of different segments. GM also points to Ultifi, its end-to-end software platform set to provide new vehicle experiences and connect to customers’ digital lives, ultimately opening up $20 billion to $25 billion in annual software and related services revenues by the 2030 calendar year. What’s more, GM’s fully autonomous vehicle efforts, as led by GM Cruise, recently received the first-ever Driverless Deployment Permit from the California Public Utilities Commission. Cruise is expected to generate $50 billion annual revenue by the end of the decade.
Also of note are GM’s manufacturing capabilities, with a target of 1 million units of annual EV capacity in North America by 2025, as well as greatly expanded battery production through the construction of four battery cell manufacturing sites. GM is also addressing the worldwide semiconductor shortage through the development of its own family of microprocessors, and it expects significant expansion for its three North American EV programs by the end of 2025.
All told, GM expects to double revenue to between $275 billion and $315 billion by 2030, with roughly 50 percent Compound Annual Growth Rate (CAGR) in its software and new businesses, and 4 percent to 6 percent CAGR in its core auto business. GM is also expecting to expand its margins by 12 to 14 percent by 2030 as it scales its EV offerings and lowers battery costs, while expanding the margins of its new businesses in excess of 20 percent.
GM stock value hit a record high earlier this year, peaking at $67.21 in January before seeing a steady decline throughout the 2022 calendar year. As of this writing, GM stock value is now hovering just below the $40-per-share mark.
Subscribe to GM Authority for more GM business news, GM stock news, and around-the-clock GM news coverage.
Comments
How much did they pay you to write this? I also find it interesting you didn’t you the word subscriptions because that is what they are calling as the main driving and no one wants subscriptions that you can just use for free on your phone.
I invested long ago in GM, but lost it all when they filed for bankruptcy. Not saying that investing now is a bad idea, but articles such as this feel a little like salt in my wounds.
We always knew the C-suite at GM had access to good drugs, but apparently they’ve upped their consumption.
The only way this happens is if consumers are stupid enough to pay for subscriptions on vehicle features that would have formerly been included, or otherwise available on their personal devices. It also is overly generous about the uptake on electric vehicles — considering so much of their revenue comes from 1/2 ton+ ICE vehicles, with owners resistant or outright hostile to EV adoption.
Additionally, this outlook fails to take into account the fragility of the consumer and macro economy. If The General thinks they will be able to maintain and command these types of per unit margins indefinitely,
over the course of 7-8 years, they’ve really failed to take into account the competition. I don’t care what anyone says — the moment the economy tanks again, discounts will be back with a vengeance. Lest GM/Ford/etc. are willing to cede market share to (especially) the Koreans and potentially lose the largest demographic since the Baby Boomers for (possibly) life, they will need to jump right back into the incentive game.
But hey, just like everything else these days: #FakeItTilYouMakeIt. In reality: Caveat Emptor.
Of course they are doubling revenue, they convinced the government to force everyone to drive EVs and eventually everyone will be forced to buy a brand new car. This is what they always wanted, people can no longer drive a vehicle until it physically falls apart, the government is requiring them to buy new vehicles to ‘save the environment’ just do not look at all the damage this is actually doing to people and the environment. (cobalt strip mining, wasteful batteries, failing power grid, pollution moved to another country)
This is the holy grail for the car manufacturers and people are buying it as if they actually care about the environment, no they care about their pocket book and have been looking for ways to force people to buy new cars. They do not make any money if people are using the same car for years.
Their dropping revenue…. Doubling profits. Revenue is down almost 50%…..
This is a case of gross vs net. Gross is way down. When you sell off inventory but don’t replace it, yes your net is going to be high because your not spending money to replace inventory….. but that will come back to haunt you latter.
Statistics-revenue (billions)
2021 127
2020 122.49
2019 137.24
2018 147.05
2017 145.59
2016 149.18
2015 135.73
2014 137.96
Profits (billions)
2021 $17.878
2020 $13.672
2019 $13.972
2018 $14.095
2017 $18.231
2016 $19.031
2015 $17.426
2014 $13. 2021
So how are they posting high profits in their lowest revenue year in the last decade???? By selling off inventory with no replacements…. Aka, a closout sale in the retail world. That’s not a sustainable business model. Don’t buy GM stock till they admit this failure and have a plan to correct it. I’ll buy after the bankruptcy. Buy low, sell high.
GM’s future, between now and 2030, is with autonomy, combined with EV.
Attach even a fraction of the PE ratio of Uber or Tesla to GM and you get a huge gain in share price.
If GM can proliferate transportation as a service model quickly, profitably, and globally, GM will make a ton of money in the next few years. After that, competition will compress profits and margins. But until then, if GM can get AV taxis on the road quickly, and upgraded AV capacity in personal autos (GM’s pending Ultra Cruise), GM share price will increase significantly.
The crucial variable – autonomy. Right now GM has the lead. If they can get that out before others catch-up, GM will win big. Delay will result in increased competition, and that will cost GM.
That’s a big “if.”
LOL, I think it’s a risky gamble because of its insistence on going all-EV without a hybrid option and certainly against the wishes of the majority of their customers.
How much of a risky gamble is it really if, in the end, the taxpayers will bailout government motors?
Warren Buffet just dumped GM. That should be all you need to know.
And bought oil stock
At this point in time I think everyone knows the best thing that could happen to GM, ford and VW group is for investors to pull their funds, collapse them, throw out their boards and start fresh.
The ONLY case anyone should make to investors is to show their last 5 years of profits and say, “want to participate in our growth?” Anything less is spin and excuses.
LOL. The auto industry is quickly becoming the villains of the story. One of the worst industries in business and GM is about to fall off a cliff.
Lost big bucks when GM filed bankruptcy. Like many others, I am now very leery of GM stock.