Challenges in the Face of Tesla’s Slow Growth Prediction
In her upcoming address to investors, General Motors CEO Mary Barra will tackle the challenge of dispelling concerns that the leading U.S. automaker might trail behind Tesla and other competitors. Last week, Tesla’s projection of sluggish growth and continued pricing pressures had a ripple effect on the shares of other automakers. While General Motors announced a $10 billion share buyback and a 33% increase in dividends, buoying its share price from a three-year low, its shares are still down 19% from their 52-week high and remain stagnant in 2024 so far.
Focus on Growth and Challenges in Key Markets
Barra’s discussion of growth prospects in North America and China, General Motors’ two primary markets, will be crucial. In China, the company experienced an 8.9% sales decline in 2023 compared to the previous year. Notably, demand for Buick and Chevrolet brands plummeted by approximately 20% and 15%, respectively, as domestic Chinese automakers continue to gain market share.
Exploring Electric Vehicle and Technological Advancements
Analysts will also scrutinize General Motors’ strategies regarding electric vehicles (EVs) and other technological innovations. Recently, the company’s Cruise robotaxi unit came under investigation by the U.S. Justice Department, the Securities and Exchange Commission, and other regulatory bodies. While CEO Mary Barra envisions that Cruise technology could yield an annual revenue of $50 billion by 2030, the unit’s efforts to increase revenue through ridesharing ventures face uncertainty.
The growth of the U.S. EV market has notably shown signs of slowing down, with Ford reducing production of its F-150 Lightning electric pickup. Ford’s decision included assigning an additional shift of production at a factory primarily constructing combustion Bronco SUVs. Despite the uncertain market conditions, General Motors is striving to expedite deliveries of their latest EV models in North America, having faced production bottlenecks with their Ultium battery pack in the previous year. Production of their popular EV, the Chevrolet Bolt, has temporarily ceased.
According to Barra’s report to investors in October, Ultium vehicle production more than doubled in the third quarter, demonstrating General Motors’ commitment to the EV market.