Sales of electric vehicles in the United States hit an all-time high in the third quarter. Normally a welcome piece of news for EV makers, the record was prompted by the end of tax incentives for EV buyers, which expired at the end of September. From now on, it’s likely to be bad news for car companies with EV plans. Kelley Blue Book reported sales of electric cars in the quarter to September shot up by 40.7% on the previous quarter and by 29.6% on the year. This trend pushed the average car price for the ...

So, who better to have on than Mark Fields, former CEO of Ford, CNBC contributor. Uh, Mark, kind of a rapid fire here. We're going to ask you about some some couple different stories and kind of go bang bang bang.First off, these these bankruptcies and some other stuff, but I want to start with General Motors because you and I have talked for a couple years uh about EVs. It's really hard. Tesla's got a big head start. GM taking a$ 1.6% billion charge related to EVs. Uh, I think they're doing okay.Hey, anecd ...

Group 1: General Motors and Electric Vehicles (EVs) - General Motors (GM) announced a $1.6 billion charge related to its electric vehicle (EV) initiatives, indicating potential future impairments [3][4] - The automakers, including GM, invested heavily in EV capacity without adequately addressing consumer demand, leading to stranded capital and misaligned market expectations [2][4] - The market uptake of EVs is expected to be lower than initially planned in the near to medium term, turning previous advantages into challenges for companies like GM [4] Group 2: Auto Parts Bankruptcies - The bankruptcy of auto parts company First Brands is significant in the context of credit conditions but not necessarily a major concern for the auto industry as a whole [6] - First Brands' issues stem from over-leverage, opaque financing, and governance problems, highlighting risks associated with heavy debt and reliance on acquisitions for growth [7] - The rise of private credit, which has less stringent requirements than traditional bank debt, may indicate broader vulnerabilities among over-leveraged companies in the industry [8] Group 3: Auto Loans and Consumer Behavior - The average price of a new car has surpassed $50,000, contributing to increased financial strain on consumers, with average auto loan payments now exceeding $750 per month [10][12] - There is a rising trend in late car loan payments and repossessions, suggesting that consumers may be struggling under the weight of high monthly payments [9][12] - Despite tightening standards from banks and auto finance companies, the subprime segment remains a relatively small portion of auto financing, indicating that the overall auto industry may not be facing imminent doom [12][13]

Core Insights - General Motors plans to take a $1.6 billion charge in Q3 due to a revamp of its electric vehicle strategy, anticipating a slowdown in demand following the end of the federal EV tax credit [1][2] - The company expects the adoption rate of EVs to decline due to recent policy changes, including the termination of the $7,500 tax incentive and a rollback of emissions regulations [2][5] - GM's charge includes a $1.2 billion non-cash impairment related to EV capacity adjustments and $400 million in contract cancellation fees [7][9] Financial Impact - The $1.6 billion charge is attributed to lower expected EV volumes due to market conditions and regulatory changes [5] - GM has faced significant financial headwinds, including a $1.1 billion hit in the previous quarter and an estimated $4 billion to $5 billion impact this year from tariffs [6] - The company aims to offset at least 30% of the tariff impact through various measures [6] Market Position - Analysts suggest that automakers like Toyota and Honda, which have invested more in hybrid vehicle development, may benefit in the U.S. auto market as GM adjusts its EV strategy [5] - GM shares rose by 0.68% during the morning trading session following the announcement of the charge [9]

Core Insights - General Motors (GM) is expected to incur a $1.6 billion charge in the third quarter due to a strategic realignment of its electric vehicle (EV) operations in response to declining demand [2][6] - The company anticipates potential future material cash and non-cash charges that could negatively impact its operational results and cash flows [3] Company-Specific Summary - GM's electric vehicle plans are not meeting expectations, leading to operational changes and the cancellation of contracts and investments [2][6] - The expiration of U.S. EV tax incentives and changes in emissions standards are contributing to a decline in EV sales [5][6] - Despite the challenges, GM's shares saw a 2% increase recently, with a total rise of about 7% in 2025, compared to a 13% increase in the S&P 500 [5] Industry Implications - GM's warning may signal broader challenges for electric vehicle manufacturers in the U.S., as similar issues could affect other automakers [4]

Core Insights - General Motors (GM) is expected to report third-quarter 2025 results on October 21, with earnings estimated at $2.26 per share and revenues at $44.19 billion [1][10] - The earnings estimate has decreased by 6 cents over the past month, indicating a year-over-year decline of 23.7%, while revenues are projected to decline by 9.4% [2] Sales Performance - In the U.S., GM sold 710,347 units in Q3 2025, reflecting an 8% year-over-year increase, with notable gains in Chevrolet (up 8.3%), GMC (up 8.6%), and Cadillac (up 25%), although Buick saw a decline of 14% [3][10] - Electric vehicle (EV) sales surged by 107% to 66,501 units, marking a new record for the company [3][10] - In China, GM delivered 470,000 vehicles, a 10.1% increase year-over-year, with the Wuling Hong Guang MINIEV being the best-selling NEV [4][10] Segment Performance - The North America segment (GMNA) is projected to have wholesale vehicle sales of 793,000 units, down 11.2% year-over-year, with revenues expected at $37.1 billion, a decline of 9.9% [5] - The GMI unit (excluding China JV) is estimated to see a slight decline in wholesale volumes to 137,000 units, with stagnant revenues at $3.5 billion, but an increase in operating income to $86 million from $42 million [6] Restructuring Efforts - GM's restructuring initiatives in China are yielding positive results, with increased market share among foreign OEMs and positive equity income from joint ventures, indicating a potential turnaround to profitability in the region [7][10] Earnings Expectations - The current model predicts an earnings beat for GM, supported by a positive Earnings ESP of +5.02% and a Zacks Rank of 3 (Hold) [8]

Market Overview - US stock markets are facing increased volatility due to escalating trade tensions between the US and China, overshadowing a strong start to the third-quarter earnings season [1] - Major indexes opened lower, reflecting investor concerns over Beijing's retaliatory measures, despite a mixed recovery attempt by midday [1][2] Market Performance - The Dow Jones Industrial Average (DJIA) initially dropped by approximately 383 points (0.8%) but narrowed its decline to around 72 points by midday [2] - The S&P 500 (SPX) fell 1% at the open, settling to a loss of about 30 points by midday [2] - The Nasdaq Composite (IXIC) experienced a more significant decline, shedding 1.5% initially and remaining down by approximately 196 points at midday [2] Earnings Season Highlights - Major financial companies such as JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) reported earnings that exceeded analysts' estimates [6] - Despite beating profit forecasts, JPMorgan Chase (JPM) saw its shares decline by 3.8% in early trading, while Wells Fargo (WFC) shares rose by 3.5% following strong performance [6] Corporate News - Broadcom (AVGO) shares surged nearly 10% after announcing an AI partnership with OpenAI to develop custom chips and networking components [7] - Other AI-related tech stocks, including Nvidia (NVDA) and Micron Technology (MU), also saw gains of about 2.9% and over 6%, respectively [8] - Bloom Energy Corp. (BE) shares soared 26.5% after securing a $5 billion deal with Brookfield Asset Management for fuel cell installations in AI data centers [12] - Fastenal Company (FAST) shares plunged 7.5% after missing third-quarter earnings estimates [12] - Albertsons Cos. (ACI) stock jumped 10% after reporting better-than-expected fiscal second-quarter results and raising its full-year outlook [12] - Ericsson (ERIC) shares rose 15% pre-bell after reporting third-quarter profit above expectations and anticipating increased shareholder distributions [12] - Johnson & Johnson (JNJ) experienced a 1.8% decline after announcing plans to separate its orthopedics business into a standalone company [12] - General Motors (GM) stock fell as the automaker plans to reduce its electric vehicle manufacturing capacity due to decreased demand [12] - USA Rare Earth Inc. (USAR) shares jumped 18.6% amid renewed US-China trade and tariff conflicts concerning rare earth minerals [12] Economic Outlook - Investors are closely monitoring the upcoming Federal Reserve's FOMC meeting scheduled for October 28-29, where a rate cut is widely expected [4] - The anticipated rate cut is driven by concerns over a weakening labor market, with a high probability (97-98%) of a quarter-point reduction [4] - Economic data releases, including CPI and PPI for September, are expected to be delayed due to an ongoing US government shutdown, but updates on industrial production and manufacturing surveys are still anticipated [5]

Core Viewpoint - General Motors (GM) is anticipated to report a year-over-year decline in earnings due to lower revenues for the quarter ending September 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The consensus estimate for GM's quarterly earnings is $2.26 per share, reflecting a year-over-year decrease of 23.7% [3]. - Expected revenues for the quarter are $44.19 billion, which is a decline of 9.4% compared to the same quarter last year [3]. Estimate Revisions - Over the past 30 days, the consensus EPS estimate has been revised 4.74% higher, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for GM is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +5.02%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - GM currently holds a Zacks Rank of 3, which, along with the positive Earnings ESP, suggests a likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, GM was expected to post earnings of $2.39 per share but exceeded expectations with actual earnings of $2.53, resulting in a surprise of +5.86% [13]. - Over the last four quarters, GM has consistently beaten consensus EPS estimates [14]. Conclusion - GM is viewed as a compelling candidate for an earnings beat, but investors are advised to consider other factors that may influence stock performance beyond just earnings results [17].

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General Motors reporting a $1.6% billion charge related to scaling back its EV plans, the company says in a regulatory filing, quote. Following recent US government policy changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow. Joining us with more is Bloomberg Intelligence, Global Autos and Industrials research analyst Steve Madden.And Steve, this is especially interestin ...