If you look at the numbers, the good times have never been so good for General Motors (GM) .
Shares of the country's largest automaker by sales are up 31% year to date and the stock has climbed nearly 45% from a year earlier.
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In July, the Detroit automaker beat Wall Street's second-quarter earnings expectations and boosted its full-year guidance.
Chief Executive Mary Barra kicked off the quarterly earnings call by thanking "the GM team, as well as our dealers, suppliers, and other business partners, for helping us deliver strong second-quarter and first-half results, including record revenue in both periods."
During the call, Barra told analysts that U.S. electric-vehicle deliveries grew 40% year over year in the second quarter, while the industry grew at 11%..
Nevertheless, GM shares fell 6.4% after the results, with analysts raising concern about EV losses, GM’s China business, and the earnings in the second half of the year.
Barra discussed GM's announced goal of going all-electric by 2035 on the Sept. 22 edition of CBS Sunday Morning.
"For our light-duty vehicles, yes," she said. "We'll be guided by the consumer, but the plans that we have in place will get us there."
However, in the face of slowing EV sales, Barra said, "I don't think we ever thought it was going be linear."
GM shared EV sales data with CNBC on Sept. 23, which showed a notable increase for GM through August.
The automaker sold nearly 21,000 EVs in the U.S. in July and August – almost matching its full second-quarter EV sales. GM’s EV sales through August were up about 70% compared with a year earlier.
GM getting Cruise back on track
“We are definitely outstripping the industry in terms of growth, in terms of EVs,” Rory Harvey, GM president of global markets, including North America, told CNBC. “We have the most comprehensive EV lineup out of any manufacturer in the industry, in the U.S., at the moment.”
The legacy automakers are still fighting for a distant second behind Tesla (TSLA) , which Motor Intelligence estimates to have sold more than 164,000 EVs during the second quarter – roughly double the sales of GM, Hyundai/Kia and Ford (F) combined during that time.
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Separately, Cruise, GM’s driverless ride-hailing company, plans to restart autonomous tests soon in California, after losing its permit to operate driverless vehicles last year following an accident involving one of its robotaxis.
GM now will use its next-generation Bolt EVs for the Cruise robotaxi business instead of the Origin vehicle as it had planned.
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"Starting today we will deploy several manual mapping vehicles in Sunnyvale and Mountain View with the intent to progress to supervised testing with up to 5 [autonomous vehicles] later this fall," the company said in a Sept. 19 post on X.
"Resuming testing in the Bay Area is an important step forward as we continue to work closely with California regulators and local stakeholders," Cruise said. "This will allow our local employees to engage directly with our product as they refine and improve our tech through R&D."
Analysts have turned their attention to GM's Investor Day, which is scheduled for Oct. 8.
Bernstein downgraded GM to market perform from outperform with a $53 price target.
The shares have appreciated 85% since last November, but Bernstein's data now signal rising earnings headwinds, the firm said.
Bernstein’s analysts cite a risk GM will announce additional capital requirements during the October event.
As such, Bernstein wants to "wait and see" on the stock.
Analyst expects GM to address EV adoption
The investment firm said that continued inventory buildup in the U.S. would lead to pricing headwinds next year, a delayed ramp on electric vehicles and Cruise pushing losses into next year. In addition, headwinds in GM's international businesses are increasing.
Bank of America Securities analysts maintained a buy rating and $85 price target, which the investment firm said are "predicated on our view that it remains a leader among the industry in its Core to Future transition."
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"We expect GM will discuss its product pipeline, provide an update on its EV strategy and long-term EV targets, review its plan for Cruise, approach to augmenting revenue from software, and capital allocation, among other topics," B of A said in a Sept. 20 research note.
The firm said the event would likely provide a glimpse into GM's efforts to balance the slowdown in EV adoption with its Future business plan, "which we still expect will be centered on electrification, but with a greater emphasis on hybrid technology."
"Consistent with past investor days, GM will likely discuss its product portfolio and could offer a preview of some upcoming vehicle launches," B of A said. "On that note, GM has talked about offering ‘bolder, more distinctive new designs with elevated technology’ to help drive growth in market share and improved profitability."
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B of A said that GM's Cruise unit lost momentum in 2023, but the company remains committed to getting Cruise back on the road with plans to operate in Phoenix, Dallas and Houston.
"Ultimately, we expect GM will take a measured approach to its expansion and it will likely be a few years until Cruise derives meaningful revenue from the business," the firm said.
During the conference call, Barra acknowledged that China market "has significant excess capacity, and many startups and established competitors continue to prioritize production over profitability."
"We have been taking steps to reduce our inventory, align our production to demand, protect our pricing, and reduce fixed costs," she said. "But it's clear the steps we have taken, while significant, have not been enough. We had expected to return to profitability in China in the second quarter."
"However, we reported a loss and we expect the rest of the year will remain challenging, because the headwinds are not easy," she said.
B of A reiterated that GM should exit the Chinese market, much as it exited Europe in 2017.
