General Motors Shakes Up the EV Market, Stock Surges 10%
Tesla Feels the Pressure as GM Gains Ground
General Motors (GM) made headlines this week with a standout third-quarter performance, surpassing market expectations and causing a stir in the electric vehicle (EV) sector. GM is gaining ground as the EV market’s growth slows, while Tesla’s market share continues to slip.
On the news that GM’s EV division is approaching break-even, the automaker’s stock soared nearly 10% in a single day. Analysts now predict that GM’s rapid growth could seriously challenge Tesla’s dominance. GM reported third-quarter revenue of $48.76 billion, a 10.5% increase compared to last year’s period, easily beating analysts’ forecast of $44.67 billion.
Nine Straight Quarters of Profit Growth
GM’s EV Market Share Climbs
GM’s strong performance wasn’t limited to revenue. Adjusted earnings per share reached $2.98, well above the $2.38 predicted by analysts at FactSet. Notably, GM has seen net income growth for nine consecutive quarters, a streak that has caught the attention of investors. The company’s EV division played a crucial role in this success, as electric vehicles accounted for 4% of its total U.S. sales in the first three quarters of 2024.
GM’s EV market share in the U.S. has steadily risen, reaching 6.5% in the first quarter, 7.1% in the second, and 9.5% in the third. In contrast, Tesla’s share of the EV market—estimated by Cox Automotive—dropped from 49.7% in Q2 to 48.2% in Q3, marking two consecutive quarters below the 50% threshold.
GM Raises Forecasts as Competition Heats Up
GM is tightening its grip on the EV market. The automaker stated that it is “rapidly gaining market share from competitors” and attracting new customers while noting that its EV segment is close to breaking even. GM aims to produce and sell approximately 200,000 electric vehicles by the end of 2024.
In contrast to European automakers like Volkswagen, BMW, Stellantis, and Aston Martin, which have recently cut their earnings forecasts due to weak demand, GM raised its full-year outlook. The company increased its pretax profit forecast from $12 billion to $13 billion earlier this year to $14 billion to $15 billion. GM expects demand to rise further in 2025, potentially fueled by interest rate cuts.
Tesla Faces Growing Competition
Tesla, long the leader in the electric vehicle market, now faces intensifying competition. As traditional automakers ramp up their EV efforts, competition is increasing, and demand for electric vehicles appears to be cooling off. According to BloombergNEF, sales of EVs and hybrids more than doubled in 2021, but growth slowed to 62% in 2022 and 31% in 2023.
Zacks Investment Research noted that Tesla’s strategy of cutting prices to remain competitive negatively impacts its short-term earnings. Meanwhile, Yahoo Finance suggested that GM’s strong performance could mark a turning point for traditional automakers as they make inroads into a market Tesla has long dominated.
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