GM (GM)’s Mary Barra may have delivered a crushing blow to Tesla (TSLA) yesterday.
I’m not hammering on Tesla, it’s just that the stock has given me a lot of opportunities to write about it in the past few weeks.
GM Blasts Through Estimates
Anyway, GM’s announced their quarterly results yesterday, and they were far better than what Wall Street had expected. For the quarter, the company beat earnings per share (EPS) expectations by $0.08, they beat on their revenue goals, and what’s better is they see even better results coming.
Management guided their 2024 EPS above those already set by Wall Street analysts, a sign that the Internal Combustion engine is ready to help fuel strong profits for the year.
The crushing blow to Tesla’s stock comes in the form of the announcement that GM was rolling back their EV visions. The company is bringing back the hybrid vehicle movement after listening to their dealers’ feedback on demand from customers.
Customers like you and me are walking into showrooms asking for hybrids. We’re not choosing to go all EV, but instead we’re choosing the more cost-effective and practical hybrid vehicles. GM announced the development of plug-in hybrids to take advantage of larger batteries and overcome the range anxiety that often comes with full EV cars like Tesla models.
Not surprisingly, Ford (F) just announced the new Ford Transit Connect, a plug-in hybrid delivery van.
The movement represents a rebirth of the hybrid vehicle while EV sales have slowed dramatically. This shift to hybrid vehicles will help auto manufacturers meet stricter environmental standards while offering more price-effective vehicles for consumers like you and me.
Bottom Line
This is a problem for Tesla (TSLA), Rivian (RIVN), and other full EV manufacturers. Like so many other products, the hybrid vehicle movement was a little ahead of its time. Now, for several reasons, the consumer has caught up with the idea of hybrid vehicles as an alternative to I.C.E and Full EVs.
This plays out in favor of GM and Ford over the next five years or so as consumers have become more sensitive to higher vehicle prices and still maintain their loyalty to the open road.
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About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.