The value of GM stock was flat during the week of August 21st to August 25th, 2023. Shares closed the week at $32.95 per share, representing a decrease of $0.17 per share, or 0.51 percent compared to the previous week’s closing value of $33.12 per share.
By comparison, shares of GM’s crosstown rival, Ford Motor Company, fell 0.42 percent, or $0.05 per share, during the same timeframe.
GM Stock Factors
GM stock value fell slightly this week, marking six straight weeks of losses. The biggest losses were realized the week before last, when GM stock value fell more than seven percent.
Some of the factors affecting GM stock value this week include a possible strike looming as UAW members vote for strike authorization amid stalled contract negotiations. Workers at the Ultium Cells plant in Ohio will also receive a bump in pay thanks to an interim wage hike. Meanwhile, 940 jobs were cut following the closure of the GM IT Innovation Center in Arizona.
In production news, battery production at the Ultium Cells plant in Ohio is back on track following a chemical spill over the weekend. However, production at the GM Wentzville plant, the GM Fort Wayne plant, and the GM Silao plant have all been reduced this month.
In technology news, GM’s Cruise division is now testing its AV technology in Raleigh, North Carolina, while the company’s AV fleet in San Francisco was reduced following a crash with a fire truck.
GM Stock Value Macro Factors – Strategy
General Motors continues to drive towards the mass adoption of all-electric vehicles, laying out its ambitious global future growth strategy last summer and reaffirming its commitment to deploying zero-emission and autonomous technologies around the world. GM also previously announced several major investments, including a massive $7 billion for its Michigan-based production facilities that includes $4 billion to convert the Orion Township plant for production of the new Chevy Silverado EV and Sierra EV, $2.5 billion for a third Ultium Cells battery plant, and a further $500 million to support production of the next-generation Chevy Traverse and Buick Enclave. The $7 billion investment is the largest single investment in GM history, and prompted responses from the White House, among other groups. GM is now shooting for EV production capacity greater than 1 million units, although the automaker does not expect EV production to ramp up until later in the year. The governor of Indiana recently confirmed the location of GM’s fourth major battery plant.
GM has also announced a new round of investments totaling $918 million benefitting four GM’s U.S.-based production facilities, including $579 million for the GM Flint Engine plant in Michigan, $216 million for the GM Bay City GPS plant in Michigan, $68 million for the GM Rochester plant in New York, and $55 million for the GM Defiance plant in Ohio. The investments will support production of GM’s next-gen Small Block V8 gasoline engine, as well as EV production. More recently, GM announced a $1 billion investment for two Flint-area GM production facilities and a C$280 investment for the GM Oshawa plant in Canada, all of which will support next-gen HD truck production, plus a $500 million investment for the GM Arlington plant to support-next-gen SUV production, $632 million for the GM Fort Wayne plant to support next-gen ICE-based pickup production, as well as $920 million for the DMAX plant in Brookville to support next-gen ICE-based HD truck production.
In December, U.S. Department of Energy finalized a $2.5B loan for Ultium Cells LLC to facilitate the construction of new battery manufacturing plants. In addition, the State of Michigan approved the construction of Lear Corporation’s new production facility to supply GM with battery disconnect units set for use in future GM EVs.
The automaker has stated that it is now holding 170,000 reservations for the new Chevy Silverado EV. GM is currently no longer taking reservations for the GMC Hummer EV, topping out at 90,000, nor is the automaker taking reservations for the 2024 Chevy Blazer EV following the fulfillment of its reservation target.
Back in November of 2021, the automaker hosted the grand opening of its new GM Factory Zero production facility in Michigan, GM’s first dedicated all-electric vehicle assembly plant. The first product to roll off the line was the 2022 GMC Hummer EV Pickup. GM CEO Mary Barra rang the NYSE opening bell from the factory floor the morning of the plant’s opening, and President Biden visited for a tour, driving the new Hummer. GM stock value rose to $65 per share following the opening. More recently, GM announced a new EV parts warehouse near the GM Factory Zero plant.
During the most recent GM Investor Day event, the automaker also said its EV business would be “solidly profitable” in 2025, that BrightDrop would reach $1B in revenue in 2023, and that its digital retailing platform for EV sales would save the company $2,000 per vehicle. It also expects to double its revenue by 2030 through new software platforms and connectivity, while adding 50 new in-vehicle digital services by 2026, creating a wealth of new potential revenue streams. GM will also generate revenue by rolling out new software such as the Future Roads data platform and enhanced subscription services, while expanding OnStar Insurance service to all 50 states.
To help ramp up EV production, agreements were announced regarding electric and hydrogen energy sources, as GM will collaborate with Nel ASA on affordable hydrogen production while a long-term deal was inked with Vale for supplying the nickel needed for manufacturing battery packs. GM previously announced a joint venture with POSCO Chemical to process materials for the automaker’s Ultium batteries, plus a joint investment with Lithium Americas for raw battery materials.
Back in 2020, 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. GM CEO Mary Barra has also stated that General Motors could catch up to Tesla in EV sales by 2025, while announcing plans to build a new network of charging stations across the U.S. GM will adopt the North American Charging Standard starting in 2025, while GM EV customers will be able to access the Tesla Supercharger network early in 2024. What’s more, GM has made a commitment to phase out fossil fuel vehicles by 2040.
With regard to EV and AV investments, GM has earmarked a total of $35 billion between now and 2025. GM’s Cruise autonomous vehicle brand is expected to rake in $50 billion over the coming years, with the finalization of autonomous vehicle rules from the NHTSA paving the way for GM to launch a fleet of new self-driving ride-share vehicles. Cruise division is now seeking to test the fully autonomous Cruise Origin without a steering wheel or pedals on the streets of San Francisco. SoftBank previously announced a further $1.35 billion investment in GM’s Cruise AV arm. The Cruise AV division reported a $500 million loss for Q2 of 2022. Cruise reports that it is currently operating roughly 400 AVs on city streets, passing the 3,000,000 driverless mile traveled mark as it expands driverless rides to Houston and Dallas, as well as Miami, Florida, Nashville, and North Carolina.
With regard to its private passenger vehicle semi-autonomous products, GM doubled the size of its current Super Cruise road network, and the company’s full-size SUVs including the Chevy Tahoe and the Chevy Suburban were the first models built with the updated Super Cruise software. Units equipped with driver assist system already on the road will receive an over-the-air update.
To promote the pivot towards EVs, Buick has introduced a new logo and brand identity as it transitions to an all-electric portfolio by 2030. Buick has also revealed the new Buick Wildcat EV Concept vehicle as a preview for its upcoming EV design language.
Although investors are eager to see GM pivot to EVs, some groups are frustrated by the automaker’s progress. Investment banking company Morgan Stanley dropped its price target from $75 to $55 in February 2022, sending GM stock tumbling. A Citigroup analyst also lowered his GM stock price target to $87 per share in June 2022, while German multinational investment bank Deutsche Bank downgraded its stock rating from Buy to Hold in July 2022. Now, however, some investors are coming around, with GM CEO Paul Jacobson purchasing 35,000 shares of GM stock in April 2022 and another 31,000 shares in May 2023, much more than was required by his executive position, and Cathie Wood’s Arc Invest Firm also purchasing shares after Wood criticized GM’s move towards EVs. Morgan Stanley also upgraded its outlook for GM stock value from Equal-Weight to Overweight, and more recently, BofA Securities maintained a buy rating for GM stock following the release of the automaker’s Q2 2023 sales figures, raising the price target to $72. Nevertheless, Berkshire Hathaway reportedly sold half of its stake in GM during Q2 of 2023.
Finally, GM previously announced a series of job cuts in the United States and abroad, with roughly 500 employees reportedly let go. Additionally, GM has announced that 5,000 employees will take part in a voluntary separation program, while GM cut hundreds of contract workers in a bid to further reduce its operating costs.
GM Stock Value Macro Factors – Sales
GM’s Q2 2023 U.S. sales figures were headlined by a 19-percent year-over-year sales increase to 691,978 units. Sales at all four of GM’s U.S. brands increased for the quarter, with retail sales growing 15 percent, and fleet sales growing 34 percent. GM also sold 15,652 EVs during Q2, fewer than the number of GM EVs sold in Q1. GM inventory improved by 4 percent.
GM Q1 2023 sales increased by 18 percent year-over-year in the United States, amounting to 603,208 deliveries, including more than 20,000 EVs, making GM the second-most popular electric vehicle manufacturer behind Tesla, moving out almost twice as many units as Ford during that period.
GM’s Q4 2022 sales figures were marked by a 41-percent year-over-year increase in the U.S. to 623,261 units. Sales increased at Chevrolet, Cadillac, and GMC brands, but decreased at Buick. The new figures brought GM’s total U.S. annual sales to 2.27 million units, besting Toyota’s 2.1 million units sold to once again make GM the number-one automaker in the U.S.
GM’s Q3 2022 sales figures were released in early October, which were highlighted by a sales increase of 24 percent to 555,580 units, with all four of GM’s U.S. brands seeing a sales increase.
GM Q1 2023 Global DeliveriesVehicle deliveries in thousands.
|Q1 2023 / Q1 2022||Q1 2023||Q1 2022|
|Asia/Pacific, Middle East and Africa||-22%||572||736|
GM Stock Value Macro Factors – Earnings
General Motors’ Q2 earnings report was highlighted by $44.7 billion in revenue, $2.6 billion in net income attributable to stockholders, and EBIT-adjusted of $3.2 billion. The results included a $792 million charge for new commercial agreements with LG Electronics and LG Energy Solution to cover the Chevy Bolt EV and Bolt EUV recall. GM also updated its full-year guidance, forecasting U.S. GAAP net income attributable to stockholders of $9.3 billion to $10.7 billion (as compared to $8.4 billion to $9.9 billion), EBIT-adjusted of $12.0 billion to $14.0 billion (compared to $11 billion to $13 billion), U.S. GAAP net automotive cash from operating activities of $18.0 billion to $21.0 billion (compared to $16.5 billion to $20.5 billion), and adjusted free cash flow of $7.0 billion to $9.0 billion (from $5.5 billion to $7.5 billion). Capital expenditures are expected at $11 billion to $12 billion, compared to $11 billion to $13 billion.
General Motors’ Q1 2023 earnings were highlighted by $2.4 billion in net income on $40.0 billion in revenue, for an EPS diluted of $1.69. CEO Mary Barra cited strong results due to “healthy customer demand, our intense focus on operational excellence, and great teamwork between GM, our dealers, our suppliers and our unions.”
The release of GM’s Q4 2022 earnings was headlined by $2.0 billion in net income on $43.1 billion in revenue. Compared to the fourth quarter of 2021, these results are a 17.6-percent improvement in net income and 28-percent increase in revenue. GM cited “wholesale volume growth and robust pricing across the portfolio,” which was partially offset by “mix normalization, commodity costs, and GMF [GM Financial] EBT lower” than last year.
GM’s Q3 2022 financial results were highlighted by a record $41.9 billion in revenue and EBIT-adjusted of $4.3 billion, with GM reaffirming its full-year earnings guidance. Analysts, however, are expecting a significant decline in profits next year in the wake of a projected weakening in consumer demand.
GM’s Q2 2022 earnings results were highlighted by $1.7 billion in income on $35.8 billion in revenue. Compared to the second quarter of 2021, these results represent a 40-percent downturn in income and 4.7-percent upturn in revenue. GM cited “higher corporate expenses primarily due to year-over-year market-to-market changes,” forecasting full-year net income of $9.6 billion to $11.2 billion, and EBIT-adjusted between $13.0 billion and $15.0 billion.
GM Q1 2023 Earnings Summary1. EPS-diluted-adjusted includes $0.03 impact from revaluation on equity investments in Q1 23 and $(0.11) in Q1 22
|METRIC||UNIT||Q1 2023||Q1 2022||CHANGE||% CHANGE|
|NET REVENUE||BILLION USD||$39,985.0||$35,979.0||$+4,006.0||+11.1%|
|NET INCOME ATTRIBUTED TO STOCKHOLDERS||BILLION USD||$2,395.0||$2,939.0||$-544.0||-18.5%|
|NET INCOME MARGIN||PERCENT||6.0%||8.2%||-2.2%||N/A|
|EARNINGS PER SHARE (EPS) DILUTED||USD PER SHARE||$1.69||$1.35||$+0.34||+25.2%|
|NON GAAP METRICS|
|ADJUSTED AUTOMOTIVE FREE CASH FLOW||BILLION USD||-$132.0||$6.0||-$138.0||-2300%|
|EPS DILUTED - ADJUSTED1||BILLION USD||$2.21||$2.09||$+0.1||+5.7%|
|DELIVERIES||MILLIONS OF VEHICLES||1,384||1,427||-43||-3%|
|GM NORTH AMERICA EBIT-ADJUSTED||BILLION USD||$3,576.0||$3,141.0||$+435.0||+13.8%|
|GM INTERNATIONAL EBIT-ADJUSTED||BILLION USD||$347.0||$328.0||$+19.0||+5.8%|
|GM CHINA EQUITY INCOME||BILLION USD||$0.1||$0.2||$-0.1||-50%|
|CRUISE EBIT-ADJUSTED||BILLION USD||$0.0||$0.0||$0.0||0%|
|GM FINANCIAL EBT-ADJUSTED||BILLION USD||$0.8||$1.3||$-0.5||-38.5%|
GM Stock Value Macro Factors – Products
GM is now pivoting to all-electric power, recently debuting several important EV models, including the 2025 Cadillac Escalade IQ, the 2024 Chevy Equinox EV, the 2024 GMC Sierra EV Denali Edition 1, the 2024 Chevy Blazer EV, and the Cadillac Celestiq. GM Energy is also launching new Ultium Home charging bundles. Over in China, consumers are embracing the all-new Buick Electra E5 electric crossover as more than 8,000 orders have poured in over the 10 days it went on sale.
However, the automaker still has a wealth of ICE-powered vehicles on offer, recently unveiling its new flagship heavy duty off-roader model, the Chevy Silverado HD ZR2 and Chevy Silverado HD ZR2 Bison. Further ICE-based reveals include the 2024 Buick Envista crossover, the all-new 2023 Chevy Colorado, the 2023 Chevy Tahoe RST Performance Edition, the refreshed 2024 Chevy Silverado HD, the 2024 Chevy Trax crossover, the 2024 GMC Sierra HD, and the all-new 2023 GMC Canyon, and the GMC Canyon AT4X AEV Edition. GM has also unveiled the new 2024 Corvette E-Ray, the first-ever hybrid-electric Corvette model.
GM stock value was on the rise early in January 2022 with the introduction of several new GM EVs in conjunction with the 2022 Consumer Electronics Show, highlighted by the 2024 Chevy Silverado EV. GM stock value rose to a record high of $67.21 per share following a keynote speech delivered by GM CEO Mary Barra. Following the event, Barra indicated that reservations for the Silverado EV RST First Edition were filled in just 12 minutes. Other announcements at CES 2022 included the Chevy Equinox EV and Cadillac InnerSpace AV concept. Further critical debuts early in 2022 included the new 2023 Cadillac Escalade-V.
GM is now offering the BrightDrop Zevo 600 all-electric light commercial vehicle, formerly known as the BrightDrop EV600. The new van is the fastest-developed vehicle in GM history. The Zevo 600 will be joined by the smaller BrightDrop Zevo 400. Merchant Fleet recently placed an order for 5,400 units of the new Zevo 400, previously known as the BrightDrop EV410. Full-scale production of the BrightDrop vans is underway now at the GM CAMI plant in Canada. BrightDrop has also announced that it has expanded its business to Canada.
The start of production for the new Cadillac Lyriq EV was celebrated at the GM Spring Hill plant in Tennessee in March 2022, coinciding with the announcement that the facility will also accommodate the production of additional EV models. Cadillac Lyriq deliveries are ramping up now. What’s more, GM announced the new Ultra Cruise autonomous driving system, which promises true “door-to-door hands-free driving” capabilities in 95 percent of all driving scenarios, with plans to eventually make the system available on every paved road in the U.S. and Canada.
GM Stock Value Macro Factors – Events
The global microchip shortage affected GM stock value by impacting production, vehicle supply, and pricing, with production pauses for the Chevy Bolt EV and Bolt EUV, as well as a production pause for the Chevy Camaro, Cadillac CT4, and Cadillac CT5. However, it looks like GM has turned a corner on production issues, clearing out 20,000 unfinished vehicles and addressing missing features for the GMC Acadia and Chevy Colorado. GM has also announced that it has cleared out three-quarters of its vehicle backlog, while GlobalFoundries and GM have signed a long-term agreement to supply GM with new microchips.
General Motors is also currently gearing up to make significant changes to its supply chain in the hopes of avoiding future shortages. That includes the development of new microcontrollers, with GM CEO Mary Barra stating GM is expected to launch its own line of chips by 2025. In January of the 2022 calendar year, the Biden Administration pushed Congress to pass a $52 billion microchip production bill aimed at alleviating the ongoing shortage.
More recently, thousands of new GM vehicles waiting to be shipped were damaged by hail in Missouri. Additionally, GM is poised to reduce production in the face of a rail shortage, per a GM Authority exclusive.
GM Stock Value Micro Factors
The General previously announced that LG Electronics Inc. has agreed to cover $1.9 billion of the $2 billion in costs associated with the replacement of the recalled Chevy Bolt EV and Chevy Bolt EUV battery packs. General Motors has also announced a new battery software update for the recalled Chevy Bolt EV and EUV. A class action regarding the recall was allowed to continue.
GM has also 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 later decided to extend the battery replacement on all model years of the Bolt EV, in addition to the all-new Bolt EUV. Despite the fault lying with battery producer LG Energy Solution, GM CEO Mary Barra announced that GM will continue its relationship with LG going forward.
The National Highway Traffic Administration (NHTSA) recently closed its investigation into the recent Chevy Bolt and Bolt EUV fires, while Chevy Bolt production has since restarted. A report from the NHTSA indicates that GM recalls accounted for only 8 percent of all vehicle recalls in 2022.
Previously, GM was hit with a $102 million verdict in a lawsuit concerning its 5.3L V8 engine, while more than 95,000 GM vehicles were recently recalled for faulty rearview cameras. A lawsuit against GM regarding the automaker’s eight-speed automatic transmission has also been granted class action status in the United States, while two more lawsuits were filed in May 2023 in Canada.
In political news, President Biden has signed the CHIPS And Science Act into law late last year, providing funding for domestic chips manufacturing and new technology development. Investments also include $5 billion for the nationwide EV charging network with sweeping EV charging infrastructure approval from the Biden Administration. What’s more, several GM EVs will be eligible for tax credits under the Inflation Reduction Act following the finalization of the U.S. EV tax credit guidelines, which went into effect on April 18th. According to GM, five Ultium-based models on sale before the end of 2023 will qualify for the full EV credit of up to $7,500. Very strict new vehicle emissions standards for the upcoming 2027 through 2032 model years further incentivize EV sales, as outlined by the NHTSA. EVs are expected to account for 66 percent of the vehicle sales by 2035. The SAE has also announced that it will work to further standardize the NACS following GM’s announcement that it will adopt the charger type.
In further political news, California can once again set its own emissions guidelines, while the Biden administration is urging automakers to ensure that their vehicle lineups consist of at least 40 percent EVs by 2030. California has also finalized plans to ban the sale of new ICE-powered vehicles by 2035. Meanwhile, Biden has signed an executive order calling for an end to the purchase of fossil fuel fleet vehicles by 2035.
The greater auto industry, including the UAW workers union and major manufacturers like General Motors, have 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. Most recently, there is contention in the ongoing contract negotiations with the UAW labor union, as well as negotiations between the UAW and the Ultium Cells LLC joint venture. It is estimated that the UAW’s demands may add $80 billion to GM’s labor costs. GM also stated that it will add more jobs next year, even during the automaker’s EV transition.
In February of 2022, GM stock value fell to the $50-per-share mark, dipping below the mark later in the month to open at $46 per share in March. GM stock value was on a downward trend through the summer, falling under the $40-per-share mark to open just over $30 per share in July and August, while rising towards the $40-per-share mark in September. GM stock value opened at $32.46 in October and just under $40-per-share in November at $39.35, rising to just over $40.00 per share in December.
Now in 2023, GM stock value opened around $34 per share in January, rising to $39.45 per share in February. In March, GM stock value began a steady decline back towards the $30-per-share mark, with May opening at $34 per share. Stock value opened at $32.49 per share in June, but is now holding steady under $40 per share, opening at $38.04 per share in August.