Last year wasn’t an easy one for General Motors (NYSE:GM). The company had to deal with rising interest rates and a United Auto Workers strike. Furthermore, electrtic vehicle demand didn’t live up to some people’s high expectations. Today’s General Motors stock analysis will show that the picture isn’t entirely bleak and there could be a spectacular recovery in 2024.
I’m not claiming GM will be trouble-free. The company halted sales of its new Chevy Blazer SUV because of software-related issues. It’s also dealing with regulatory scrutiny and criticism pertaining to the company’s Cruise robotaxis. Consider these issues, but don’t let them deter you from buying GM stock. I’ll share some startling statistics that support the bullish argument for General Motors.
Bet on an Unexpected Winner With GM Stock
Here’s a quiz question for you. Which U.S. company was last year’s top-selling automaker? The answer, believe it or not, is General Motors. The company sold 2.6 million vehicles in 2023, up 14.1% year over year, despite the autoworkers’ strike and elevated interest rates.
This doesn’t mean 2024 will be easy for General Motors and other U.S. automakers. Cox Automotive warned, “High vehicle prices and high interest rates remain the industry’s Grinch right now.”
Regarding the high vehicle prices, General Motors is helping to offset this issue by offering $7,500 incentives on the company’s EVs that recently lost their U.S. government tax credits. And as far as high interest rates are concerned, Wolfe Research analyst Rod Lache believes that (per Barron’s) automakers like General Motors “should benefit from falling interest rates.”
Lache’s argument makes sense. His line of thinking is, “Lower rates should help auto demand by lowering car payments, making them more affordable.”
So, if the Federal Reserve reduces interest rates as anticipated, General Motors could get a nice boost to its financials this year.
General Motors Proves That the EV Market Isn’t Dead
With fresh data, General Motors may have just debunked the notion that the market for electric vehicles is nonexistent. Surprisingly, General Motors reported battery-EV sales of 19,469 units in 2023’s fourth quarter, up 20% year over year.
If you think that sales-growth rate is impressive, then get a load of this. For the full year of 2023, General Motors’ battery-EV sales grew by approximately 90% YOY to 75,585 units.
Truly, betting against General Motors based on the perceived death of the EV market would be a terrible mistake. General Motors hasn’t given up on its target of 1 million units of EV-production capacity by 2025.
General Motors’ $7,500 EV incentives show that the automaker will go the extra mile to put its clean-energy vehicles on the roadways in 2024.
General Motors Stock Analysis: A Recovery Is in Progress
General Motors wasn’t a “Magnificent Seven” member last year, but the company could still provide magnificent value to its loyal shareholders. My General Motors stock analysis concludes that it’s a “back-door” (i.e., indirect) bet on falling interest rates.
Plus, investing in General Motors is a smart way to wager on a surprisingly active EV market. Indeed, after a tough 2023, General Motors’ recovery may already be in progress this year. Consequently, now is the right time to pick up a few GM stock shares for a buy-and-hold position.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
