General Motors (GM) Rallies Despite 5.5% Q3 Sales Decline and Weakening EV Performance

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, marking a year-over-year decrease driven by plummeting EV sales.
• Toyota’s sales increased 0.6%, with hybrids and EVs accounting for 57% of its product mix.
• Honda reported a 9.3% sales surge, powered by record-breaking hybrid vehicle demand.
• Analysts maintain a Strong Buy consensus on GM with price targets suggesting approximately 40% potential gains.

General Motors stock (GM) gained 3% Thursday, reaching $79.29 despite the Detroit automaker posting a 5.5% decline in third-quarter U.S. vehicle deliveries.

General Motors Company, GM

The company delivered 670,974 vehicles throughout the quarter, representing a decline from the previous year when electric vehicle sales reached historic peaks.

Much of the year-over-year decline stems from unfavorable EV comparisons. Last year’s figures were boosted by consumers rushing to secure a $7,500 federal tax credit before eligibility restrictions took effect.

GM’s electric vehicle lineup experienced significant headwinds this quarter. The Equinox EV saw deliveries plunge 92%, while Hummer EV sales tumbled 73%.

The automaker lacks substantial hybrid offerings to cushion the blow. With only the Corvette available as a hybrid model, this strategic gap is becoming increasingly apparent.

Toyota And Honda Capitalize On Market Shift

Toyota avoided similar struggles, posting a 0.6% sales increase to 633,223 units. Electrified vehicles, including its extensive hybrid range, surged 28.5%.

This momentum allowed Toyota to close its gap with GM to fewer than 136,000 units. The same period last year showed a gap exceeding 335,000 vehicles.

Honda delivered an even more impressive performance, with sales climbing 9.3% and hybrid deliveries exceeding 106,000 units—a new company milestone.

“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 gasoline prices aren’t benefiting GM’s strategy. With the national average at $4.41 per gallon, demand for the large trucks and SUVs central to GM’s portfolio faces mounting pressure.

Where GM Is Still Winning

The picture wasn’t entirely bleak. GM’s budget-friendly compact crossover segment, featuring the Chevy Trax and Buick Envista, delivered record quarterly performance.

Trailblazer sales jumped 51%, Envista climbed 18.4%, and the Trax advanced 16.3%. The automaker also emphasized its dominant position in full-size pickup trucks and commercial fleet sales.

Cadillac represented a particular challenge, declining 25% year-to-date. Every GM brand has posted negative year-over-year results through the first three quarters.

GM president Duncan Aldred maintained an optimistic outlook, highlighting the imminent arrival of next-generation Silverado and Sierra pickup models. Dealer deliveries are anticipated to commence in the fourth quarter.

The sales shortfall hasn’t dampened Wall Street enthusiasm for the stock. GM holds a Strong Buy consensus rating supported by 14 Buy recommendations issued over the last three months.

The consensus price target stands at $111.14, suggesting approximately 40% appreciation potential from current trading levels.

Other manufacturers reporting Thursday included Stellantis, essentially unchanged with Ram increasing 29%; Nissan, advancing 1.4%; Hyundai, rising about 3%; and Kia, climbing 7.8% on record quarterly deliveries of 236,659 vehicles.