General Motors (GM) will seek to reassure investors on Tuesday that it can make profitable electric vehicles as it becomes a more formidable EV rival to Tesla (TSLA) and Ford (F). GM stock tried to regain a key support level on Monday.
GM Investor Event: What To Expect
The investor event on Tuesday comes after GM’s U.S. EV sales vaulted 60% in the third quarter, offsetting a 2% decline for its total new vehicle sales. The auto giant overtook Ford to become the No. 2 EV seller behind Tesla in the U.S. market, at least for now, thanks to a growing lineup of new and cheaper electric models.
The first-ever Chevy Equinox EV made up 30% of almost 32,100 electric cars GM sold last quarter. That model can cost as low as $27,500 after tax credits while providing 319 miles of estimated driving range.
But investors remain worried about EV losses for automakers given the high costs of developing this technology. Moreover, American consumers remain lukewarm about electric cars thus far.
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“We expect more details on (GM’s) battery electric vehicle plans and margins,” RBC Capital Markets analyst Tom Narayan wrote in an Oct. 3 note to clients. In particular, he expects General Motors to discuss “how it can profitably produce the Equinox with a $27,000 price tag,” with government credits potentially coming to the rescue given the model’s locally manufactured batteries.
Later this week, Tesla holds its own event for investors, which will focus on robotaxis and may see the reveal of the cheapest Tesla model yet. Last week, Tesla killed its entry-level Model 3, featuring China-made batteries, which made it ineligible for the $7,500 federal EV tax credit.
Despite surging sales, GM is likely to withdraw its target to produce 200,000-250,000 EVs in 2024, Narayan said. He estimated the automaker is on track to sell more than 100,000 EVs this year, far below its production guidance range.
GM Stock Tests Key Level Of Support
Shares of General Motors edged higher on the stock market today. GM stock cleared a 49.86 buy point on Sept. 2, then pulled back to the 50-day moving average. It continued to test that short-term level of support on Monday after closing just below it on Friday.
Ford and Tesla stock fell around 1% to 2% each on Monday. Ford stock remains below a sharply falling 50-day line and even further under the 200-day line. Tesla stock has a 271 cup-base buy point, but is just finishing up a handle that will lower its entry to 264.84 by Tuesday morning.
GM To Go Slower On Electric Vehicles
Sources told Reuters last week that GM will try to soothe investors’ nerves about slower-than-expected demand for purely battery electric vehicles. It could even signal improving profits in 2025, they said.
On Tuesday, the message to investors “is expected to focus less on aggressive growth and more on stability,” the report said.
The unnamed sources also said that General Motors will emphasize that profit margins on internal combustion engine (ICE) vehicles have not topped out and that EV profits are closer than many think.
Recently, automakers faced a surprise EV slowdown in the middle of their shift away from ICE cars. That forced GM to yank several prior targets for electric cars, though EV momentum is now on the upswing.
Year to date, GM stock is up more than 27% vs. declines for shares of both Tesla and Ford. That reflects its booming ICE profits thanks to strong pricing and lower incentives vs. rival automakers.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
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