GM Stock Value Up 4 Percent During Week Of November 13 – November 17, 2023

The value of GM stock increased during the week of November 13^th to November 17^th, 2023. Shares closed the week at $28.03 per share, representing an increase of $1.18 per share, or 4.39 percent compared to the previous week’s closing value of $26.85 per share.

By comparison, shares of GM’s crosstown rival, Ford Motor Company, increased 4.16 percent, or $0.41 per share, during the same timeframe.

GM Stock Factors

GM stock value was back on the rise this week after plummeting 10 percent last week. The week prior, GM stock value was up 9 percent, and down 8 percent the week before that.

Factors affecting GM stock value this week include the news that the UAW membership will ratify the new labor contract with GM. Although the final official voting tally has yet to be provided, voting results from several major GM facilities have tipped the vote to ratification. In other union news, President Biden has voiced support for the UAW’s push unionize all U.S. autoworkers.

In investing news, Berkshire Hathaway has sold off its stake in GM, while some investors are questioning the viability of Cruise, GM’s autonomous vehicle technology division. A GM supplier has also filed for bankruptcy.

BrightDrop is now to be fully integrated with GM, rather than a wholly owned subsidiary.

Finally, GM has unveiled the new 2025 Cadillac Optiq, an all-electric crossover set to slot in under the Lyriq.

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. The governor of Indiana recently confirmed the location of GM’s fourth major battery plant which it plans to build in a partnership with Samsung SDI. In October 2023, GM said it’s still on track to build 1 million EVs annually in North America by the end of 2024, but was scrapping its goal of production 400,000 EVs in the continent by mid-2024.although the automaker does not expect EV production to ramp up until later in the year. GM is now set to invest $1.25 billion into its Lansing Grand River plant for future EV production.

GM has also announced a 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.

GM says it is 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.

GM also says 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. 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.

GM’s Cruise LLC autonomous vehicle division recently announced a pause of its driverless operations across all its fleets, following the state of California decided to suspend the robotaxi company’s driverless permits while the NHTSA investigates, among other incidents, an accident during which a Cruise AV run over and dragged a pedestrian before coming to a stop. Just before this turn of events, Cruise had reached the 5 million driverless mile mark.

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.

Some investors are coming around to GM, 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. Fitch Ratings has upgraded its rating for GM and GM Financial from BBB- to BBB, indicating the credit agency believes GM has a low chance of default. 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. In addition, 940 jobs were cut following the closure of the GM IT Innovation Center in Arizona.

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 Q3 2023 Global Deliveries

GM Stock Value Macro Factors – Earnings

GM’s Q3 2023 earnings report on October 24^th highlighted $3.1 billion in net income on $44 billion in revenue, representing a 7.3 percent decrease in income and a 5.4 percent increase in revenue compared to the third quarter of 2022. GM’s EBIT-adjusted earnings were $3.5 billion, a 16.9 percent or $723 million drop compared to the $4.28 billion figure announced over the same period last year.

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 Q3 2023 Earnings Summary

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 with more than 8,000 orders pouring in over the first 10 days it went on sale.

During the Q3 2023 earnings presentation, CEO Mary Barra stated that adjustments to the automaker’s software integration strategy would require pushing back the launch of the Chevy Equinox EV, Chevy Silverado EV RST and GMC Sierra EV Denali by a few months. On October, 25^th, Honda announced that it was no longer collaborating with GM on affordable electric vehicles, a plan that was initially announced in April 2022.

However, the automaker still has a wealth of ICE-powered vehicles on offer, 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, plus the 2025 Cadillac CT5 and the 2024 GMC Acadia at the 2023 North American International Auto Show.

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.

During the Q3 2023 earnings presentation, CEO Mary Barra stated that the next-generation 2025 Chevy Equinox would launch in mid-2024, while the overhauled 2025 GMC Terrain would also hit the market in the middle of next year. In addition, the much-anticipated 2024 Chevy Equinox EV would arrive in the U.S. in the beginning of next year. Chevy claims it has nearly 200,000 hand-raisers for the new Equinox EV.

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. GM is 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.

Heading south, congestion at the U.S.-Mexico border is slowing down vehicle and parts shipments. Further down the western continent, workers in GM Brazil’s assembly plants went on strike in October in protest of recent layoffs, affecting production for vehicles destined for the South American market.

The biggest factor affecting GM stock value in the last month is the ongoing contract negotiation with the UAW labor union, as well as the associated labor strike. Before reaching a tentative contract agreement this past week, the latest developments included worker strikes at the GM Wentzville plant in Missouri that builds the Chevy Colorado, the GMC Canyon, the Chevy Express and the GMC Savana, the GM Lansing Delta Township plant in Michigan that builds the Chevy Traverse and Buick Enclave, as well as the GM Arlington plant in Texas that manufactures the Chevy Tahoe, the Chevy Suburban, the GMC Yukon and the Cadillac Escalade.

The General’s 18 parts distribution centers across the United States were also impacted by the UAW strike, with a ripple effect pushing General Motors to halt Chevy Malibu and Cadillac XT4 production at its Fairfax, Kansas assembly plant, in addition to laying off workers at various parts production plants.

During the Q3 2023 earnings presentation, and before UAW workers went on strike at the Arlington and Spring Hill plants, General Motors confirmed that the strike had resulted in losses estimated at $800 million and counting.

The union also called for GM Spring Hill plant workers to strike as contract negotiations heated up with General Motors, following tentative agreements with Ford and Stellantis. The next day, the UAW and GM finally reached a tentative deal that still needs to be ratified by the union’s GM workforce. In the meantime, all the plants and parts distribution centers are up and running again, likely triggering a sigh of relief for the automaker, who recently announced that its Investor Day presentation had been rescheduled for March 2024.

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.

GM 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.

In further news, GM may be facing a massive recall of more than 20 million vehicles due to faulty airbag inflators.

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.

Several GM EVs will be eligible for tax credits under the Inflation Reduction Act, which went into effect on April 18^th. 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 Biden Administration plans to roll out a $100 billion plan for new EV rebates.

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, later holding steady under $40 per share, opening at $38.04 per share in August. GM stock value declined through August to open at $33.59 per share in September. It opened at $32.84 in October, only to dip below the $30 mark for the first in three years on October 5^th. GM stock value opened at $28.73 per share in November. GM stock value hit a new low on November 10^th, bottoming out at $26.30 per share before rising to $26.85 per share by the end of trading for the day.

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