TLDR
- General Motors shares advanced 3% to $79.29 Thursday despite reporting a 5.5% decline in third-quarter U.S. vehicle deliveries.
- The automaker delivered 670,974 vehicles in Q3, with electric vehicle sales plummeting as much as 92% year-over-year.
- Toyota’s sales increased 0.6%, with electrified vehicles and hybrids representing 57% of its sales mix.
- Honda reported a 9.3% sales increase, driven by record-breaking hybrid vehicle demand.
- Analysts maintain a Strong Buy rating on GM with average price targets suggesting approximately 40% upside potential.
General Motors stock (GM) advanced 3% to $79.29 on Thursday despite the Detroit automaker disclosing a 5.5% decline in its third-quarter U.S. vehicle deliveries.
The company delivered 670,974 new vehicles throughout the quarter, representing a decline from the comparable period in 2023 when electric vehicle deliveries reached all-time highs.
The year-over-year EV comparison accounts for much of the weakness. Prior-year figures were boosted by consumers accelerating purchases to secure a $7,500 federal EV tax credit before its expiration.
This quarter, GM’s electric vehicle deliveries collapsed. Equinox EV sales plunged 92% while Hummer EV deliveries tumbled 73%.
The automaker lacks a significant hybrid vehicle portfolio to offset these losses. Its sole hybrid offering is the Corvette, a strategic gap becoming increasingly apparent.
Toyota And Honda Capitalize On Hybrid Demand
Toyota avoided this challenge entirely. The Japanese automaker’s deliveries increased 0.6% to 633,223 units, with electrified vehiclesāincluding hybridsāsurging 28.5%.
This performance allowed Toyota to close the distance with GM to fewer than 136,000 units. Twelve months earlier, that margin exceeded 335,000 vehicles.
Honda delivered an even more impressive quarter, posting a 9.3% sales gain with hybrid deliveries exceeding 106,000 unitsāa new company benchmark.
“We’re finding more and more consumers are figuring out hybrids meet their needs,” said Lance Woelfer, head of American Honda’s U.S. sales.
Elevated fuel prices aren’t helping GM’s position. The nationwide average reached $4.41 per gallon, dampening consumer appetite for the full-size trucks and SUVs that anchor GM’s product strategy.
Where GM Is Still Winning
The quarter wasn’t entirely negative. GM’s budget-friendly compact SUV segment, featuring the Chevy Trax and Buick Envista, posted its strongest quarterly performance on record.
Trailblazer deliveries jumped 51%, Envista climbed 18.4%, and Trax increased 16.3%. The automaker also emphasized its dominant position in full-size pickup trucks and commercial fleet deliveries.
Cadillac represented the weakest segment, declining 25% year-to-date. Each GM brand has posted lower sales through the first nine months of 2024.
GM president Duncan Aldred maintained an optimistic tone, highlighting the forthcoming next-generation Silverado and Sierra pickup trucks. Those redesigned models are scheduled to arrive at dealerships during the fourth quarter.
Notwithstanding the sales shortfall, Wall Street analysts remain confident in the stock. GM holds a Strong Buy consensus rating supported by 14 Buy recommendations issued over the previous three months.
The consensus price target stands at $111.14, suggesting approximately 40% appreciation from present trading levels.
Additional automakers releasing Thursday results included Stellantis, essentially unchanged with Ram climbing 29%; Nissan, advancing 1.4%; Hyundai, gaining roughly 3%; and Kia, rising 7.8% with a record 236,659 units delivered during the quarter.
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