GM Ending Chevy Bolt Production By The End Of 2023; Automaker Defies Wall Street With Earnings Gain

GM is the second highest seller of EVs in the US, but is far behind Tesla.

GM Ending Chevy Bolt Production By The End Of 2023; Automaker Defies Wall Street With Earnings Gain

General Motors (GM), on Tuesday, informed investors that it will stop producing the Chevrolet Bolt at the end of 2023. GM CEO Mary Barra announced the news during an earnings call. She was discussing GM's first-quarter revenue and earnings exceeding expectations, while also raising the profit guidance for the year 2023. Meanwhile, GM stock fell early.

GM ignored analysts' predictions of rising inflation, and interest rates eating into profits in Q1. GM has already disclosed that it delivered over 20,000 electric cars in the first three months. Barra wrote to shareholders in a letter before Tuesday's earnings report that this was largely due to a record third quarter of Chevrolet Bolt EVs and Bolt EUVs.

Barra also said that Cadillac Lyriq's sales are increasing from a low base. GM has now surpassed Nissan in the U.S. EV Market after increasing its share by 8 percentages points in Q1.

General Motors is working hard to expand its electric vehicle operations. Barra said at the end January that the company is on track to produce "400,000 EVs" in North America between 2022 and the first half of 2023. The U.S. automobile manufacturer expects to reach its goal of selling one million electric vehicles in North America before 2025.

The GM CEO informed investors on Tuesday that a Detroit factory, which has been producing the Chevy Bolt for six years, will be re-equipped to produce an electric truck.

General Motors' stock fell 1.6% during Tuesday's market trading, putting it below the 50-day line and the 200-day line.

Earnings of GM

Wall Street analysts estimated that GM earnings in Q1 would drop 17%, to $1.72 a share. According to FactSet, they aimed for revenue to increase 7% to reach $38.55 billion.

Results: GM's EPS grew 6% in the first quarter to $2.21. Revenue increased by 11%, to $39.98 Billion.

Outlook: GM executives expect earnings per share to be between $6.35 and $7.35 for the full year, up from their previous estimate of $6-$7. GM's forecast for net income attributable stockholders is $8.4 billion to $9.9 billion. This is down from an earlier estimate of $8.7-$10.1 billion. The company's EBIT-adjusted earning range is $11 billion to $13 billion, an increase from its previous outlook of $10.5 billion to $12.50 billion.

GM has also increased expectations for adjusted automotive cash flow, which is now expected to range between $5.5 billion and $7 billion. This is a slight increase from the forecast of $5 billion to $7 billion in Q4 of 2022.

Analysts expect 2023 full year EPS to drop 21% to just $6.01, with sales rising around 2% to $159,31 billion.

GM blew away analyst expectations for fourth-quarter revenue and earnings at the end of January. GM Q4 profits soared by 57%, to $2.12 a piece. Revenues grew 28% to $43.1billion.

General Motors will grow its U.S. car sales by 2.3% in 2022 due to a rise in demand during the second half of that year.

During the first half of 2022, chip shortages and other disruptions in supply will affect vehicle production and inventories across the industry. This situation will ease up during the last quarter. Demand concerns began to grow in Q4 but have continued since.

Keep out of the price war

Detroit, Michigan's auto giant finished 2022 by reclaiming No. Toyota lost the No. 1 position for U.S. car sales to Ford. The recovery in the second half of the year offset the sharp decline, exacerbated by supply disruptions during the first six month of the year.

GM also indicated that it had no plans to join the price war in autos, which Tesla (TSLA), this year, started. General Motors plans to reduce costs by $2 billion between 2023 and 2025.

Barra said during the Q4 earnings conference that he believes prices are where they should be.

Analysts expect GM's profits to decline this year, while sales are expected to remain mostly flat.

Earnings and EV sales shift

General Motors, along with other traditional automakers, is making the historic shift from combustion engine cars to electric vehicle.

GM (F) and Ford (F), who are competing for market shares, have a significant gap between their EV sales and those of Tesla.

Three new EV models will be available in 2023 from GM's mass-market Chevrolet. These new models include all electric versions of the popular Silverado pickup truck and the Blazer, Equinox and Equinox SUVs.

The new models may help GM achieve its EV growth strategy. In 2022, sales and production of the next-generation GM EVs using an Ultium-branded EV platform were sluggish. This has remained true in the first quarter.

Bolt EVs older than the Bolt EVs performed well.

Electric vehicles will be a major growth driver in the future for automakers. This is especially true now that government regulations are essentially mandating their use.

By 2030, GM Ford and Stellantis expect that up to half of the U.S. vehicle sales will be battery-electric vehicles (BEVs), also known as all-electric cars.

GM also announced a recent $650 million investment into the mining operation of Lithium Americas. According to reports, the capital will be used to develop LAC’s Thacker Pass Lithium Mining operation in Nevada. The site is expected to produce enough to power up to one million electric vehicles per year.

General Motors is ranked fourth in IBD’s Auto Manufacturers group. GM's stock has a Composite Rating of 73 out of 99. The stock has a Relative Strength rating of 38. GM's EPS rating is 84 of 99.