General Motors (NYSE:GM) stock is falling today after Tesla’s (NASDAQ:TSLA) dismal second-quarter earnings report. Shares of the “Big Three” automaker have been volatile today and GM stock is falling along with most of its peers as Tesla’s poor revenue and EPS drag down the entire sector.
That doesn’t mean General Motors reported poor earnings, however. On the contrary, the company raised its full-year guidance after beating Wall Street estimates on several key metrics. But GM has also confirmed delays with its electric vehicle (EV) production, raising some questions about its plans for the future.
Does this mean that GM stock is a name investors should be avoiding in the coming months? Let’s take a closer look.
What’s Happening With GM Stock?
It hasn’t been an easy season for General Motors so far. Shares have been slipping of late, dragging GM stock down for both the week and month. This losing streak hasn’t stopped today, although GM is currently on an upward trajectory, down just 0.5% as of this writing. If this momentum continues, shares could finally pull back into the green.
This recent decline is likely due, at least in part, to GM’s EV news. Yesterday, the company confirmed that it would be delaying production of both its second electric truck plant and the first Buick EV. “The six-month delay in retooling the electric truck plant in Michigan, until mid-2026, also means GM will not achieve a prior target of having North American production capacity of 1 million EVs by 2025,” reports NBC.
For a company that had once seemed to be highly focused on EV production, that’s hardly encouraging. However, it doesn’t mean that the auto giant is abandoning its EV endeavors. Chief Financial Officer Paul Jacobson has stated that General Motors is still “rapidly scaling” at multiple EV battery production plants. Jacobson also noted that once GM “reaches output of 200,000 units by the fourth quarter,” the company expects that its EVs will be profitable on a “production, or contribution-margin basis.”
Why It Matters
As always, it’s important to take today’s news in context. GM may be scaling back certain areas of its EV production, but that doesn’t mean it’s abandoning an entire line of vehicles. Therefore, this isn’t necessarily bad news for General Motors or for the EV market in general. The company has seen impressive quarterly sales growth lately and, as InvestorPlace contributor Joel Baglole notes, that included a 40% increase in EV sales.
GM stock may have struggled this morning, but it is already showing signs of shaking off the Tesla-driven turbulence. While TSLA stock may have a harder time recovering from its Q2 earnings report, GM likely won’t.
On the date of publication, Samuel O’Brient 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
