GM Stock Value Flat During Week Of January 2 – January 5, 2024

The value of GM stock was flat during the week of January 2^nd to January 5^th, 2024. Shares closed the week at $35.99 per share, representing an increase of $0.07 per share, or 0.19 percent compared to the previous week’s closing value of $35.92 per share. Note that markets were closed January 1^st in observance of New Year’s Day.

By comparison, shares of GM’s crosstown rival, Ford Motor Company, decreased 2.79 percent, or $0.34 per share, during the same timeframe.

GM Stock Factors

GM stock value was flat for the third week in a row following a six-percent increase earlier last month.

Factors affecting GM stock this week included the release of GM’s Q4 2023 sales figures, which were highlighted by a 0.3-percent increase to 625,176 units for the quarter. GM’s sales figures for the 2023 calendar year were up 14-percent growth to 2,549,698 units.

New requirements from the U.S. Department of Energy for EV federal tax credit eligibility went into effect on January 1^st, and as a result, the Chevy Bolt EV and Bolt EUV are currently the only vehicles that qualify. GM is now offering a $7,500 rebate on select models as additional parts are sourced to make further GM EVs eligible for the tax credit.

Finally, GM has expanded a recall for the 2014 Chevy Cruze and 2014 Buick Verano related to faulty airbag inflators.

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 previously confirmed the location of GM’s fourth major battery plant, which GM plans to build in partnership with Samsung SDI. GM is now set to invest $1.25 billion into its Lansing Grand River plant for future EV production, as well. The Ultium Cells Spring Hill plant in Tennessee recently manufactured its first battery cell pouches as construction of the facility is scheduled for completion in early 2024.

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 its EV business will 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.

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. In December of 2023, GM CEO Mary Barra also announced that GM is still on track to fully transition its light-duty vehicle lineup to EVs by 2035.

Looking ahead, GM expects its EV business to be profitable by the second half of the 2024 calendar year.

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 was previously expected to rake in $50 billion over the coming years, with the finalization of autonomous vehicle rules from the NHTSA expected the way for GM to eventually launch a fleet of new self-driving ride-share vehicles. SoftBank previously announced a further $1.35 billion investment in GM’s Cruise AV arm.

However, GM’s Cruise LLC autonomous vehicle division has since announced a pause of its driverless operations across all its fleets, following the state of California’s decision to suspend the robotaxi company’s driverless permits while the NHTSA investigates, among other incidents, including an accident during which a Cruise AV ran over and dragged a pedestrian before coming to a stop. Just before this turn of events, Cruise reached the 5 million driverless mile mark. GM has since announced that it will scale back its ambitions with Cruise, a move expected to significantly reduce the division’s operating costs.

Cruise co-founder and CEO Kyle Vogt resigned in November of 2023, as has company co-founder and CPO Daniel Kan. Interim execs have been named to oversee the robotaxi company. The company’s entire fleet of AVs is currently grounded. When Cruise’s operations do restart, it will be in only one U.S. city for the foreseeable future.

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, and unloaded its remaining stock in November 2023. In addition, some investors are questioning the viability of Cruise, GM’s autonomous vehicle technology division.

Finally, GM announced last year that 5,000 employees would take part in a voluntary separation program, while hundreds of contract workers were let go in a bid to further reduce operating costs. In addition, 940 jobs were cut following the closure of the GM IT Innovation Center in Arizona, and a further 1,314 workers were let go following the discontinuation of the Chevy Camaro, the Chevy Bolt EV and the Chevy Bolt EUV. Meanwhile, the Cruise LLC robotaxi division laid off roughly 900 employees, representing 24 percent of its workforce, in addition to firing nine company leaders.

Late in November, 2023, GM announced a $10 billion share repurchase program and 33-percent dividend increase, which catapulted GM stock value with a 12-percent boost. The announcement was made in conjunction with new earnings guidance for 2023, which included an estimated loss of $1.1 billion due to the UAW strike. GM also stated that it expects vehicle production costs to rise $500 per vehicle in conjunction with the new UAW contract inked last year.

GM Stock Value Macro Factors – Sales

Q3 2023 U.S. sales figures showed a 21-percent jump compared the same period in 2022, amounting to 674,336 units. GM increased its market share in the truck segment, while EV sales were up 28 percent as well. GM ended the quarter with a rise in dealer inventory, its best quarterly finish in three years.

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 Q3 2023 Global Deliveries

	Q3 2023 / Q3 2022	Q3 2023	Q3 2022
Global Deliveries	5%	1,619	1,539
North America	20%	796	663
- U.S.A	21%	674	556
Asia/Pacific, Middle East and Africa	-6%	703	746
- China	-14%	542	630
South America	-8%	120	130
- Brazil	-1%	87	88

Vehicle sales in hundreds of thousands of units (000)

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 Q3 2023 Earnings Summary

METRIC	UNIT	Q3 2023	Q3 2022	CHANGE	% CHANGE
GAAP METRICS
NET REVENUE	BILLION USD	$44,131	$41,889	$+2,242	+5.4%
NET INCOME ATTRIBUTED TO STOCKHOLDERS	BILLION USD	$3,064	$3,305	$-241	-7.3%
NET INCOME MARGIN	PERCENT	6.9%	7.9%	-1.0 ppts	-12.7
EARNINGS PER SHARE (EPS) DILUTED1	USD PER SHARE	$2.20	$2.25	$-0.05	-2.2%
NON GAAP METRICS
EBIT-ADJUSTED	BILLION USD	$3.56	$4.29	$-0.7	-17%
EBIT-ADJUSTED MARGIN	PERCENT	8.1%	10.2%	-2.1 ppts	-20.6%
AUTOMOTIVE OPERATING CASH FLOW	BILLION USD	$6,794	$6,502	$292.0	+4.5%
ADJUSTED AUTOMOTIVE FREE CASH FLOW	BILLION USD	$4,910	$4,593	+317	+6.9%
EPS DILUTED - ADJUSTED1	BILLION USD	$2.28	$2.25	$+0.0	+1.3%
DELIVERIES	MILLIONS OF VEHICLES	1,619	1,539	80	+5.2%
MARKET SHARE (IN GM MARKETS)	PERCENT	9.2%	9.1%	+0.1 ppts	N/A
DIVISIONAL RESULTS
GM NORTH AMERICA EBIT-ADJUSTED	BILLION USD	$3,526	$3,894	$-368	-9.5%
GM INTERNATIONAL EBIT-ADJUSTED	MILLION USD	$357	$334	$+23	+6.9%
GM CHINA EQUITY INCOME	MILLION USD	$192	$330	$-138	-41.8%
CRUISE EBIT-ADJUSTED	MILLION USD	$500	$700	$-200	-28.6%
GM FINANCIAL EBT-ADJUSTED	MILLION USD	$741	$911	$-170	-18.7%

1. EPS-diluted and EPS-diluted-adjusted include a $(0.05) and $0.03 impact from revaluation on equity investments in the three months ended September 30, 2023 and September 30, 2022.

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, the Cadillac Celestiq, the 2025 Cadillac Optiq, and the 2026 Cadillac Vistiq. 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, as well as two refreshed full-size SUVs, the 2025 Chevy Tahoe and 2025 Chevy Suburban.

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. In November 2023, GM announced that BrightDrop would now be fully integrated with GM, rather than a wholly owned subsidiary, saving even more money.

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.

In South America, workers in GM Brazil’s assembly plants went on strike in October 2023 in protest of recent layoffs, affecting production for vehicles destined for the South American market.

The biggest factor affecting GM stock value in the fall of 2023 was the contract negotiation with the UAW labor union, as well as the associated labor strike. Before the UAW-GM contract agreement was ratified by union workers, strikes crippled production 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 at 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. All facilities impacted by the strike were up and running again from early November 2023 onwards.

GM Stock Value Micro Factors

Very strict new vehicle emissions standards for the upcoming 2027 through 2032 model years were released to 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.

In legal news, GM has filed a lawsuit against the city of San Francisco seeking $121 million in back taxes and penalties, with the automaker alleging that the city inflated its tax bill by incorrectly including Cruise, GM’s autonomous vehicle division, in tax calculations.

Finally, GM was re-released a recall for the Chevy Bolt EV over a potential fire risk related to the all-electric hatchback’s seatbelt pretensioners.

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. Now in 2024, GM stock is holding steady at around $35 per share

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