Kyle Grillot / Bloomberg via Getty Images General Motors reported strong domestic sales last quarter. Key Takeaways General Motors and Ford shares have taken off after the car companies reported strong sales and said they'll have an easier time adjusting to federal policy changes. Domestic car companies may benefit from less strict emissions rules and a more lax approach to tariffs on certain auto parts. America’s big car companies are firing on several cylinders. General Motors (GM) and Ford (F), ...

General Motors (NYSE:GM) Q3 2025 Earnings Call October 21, 2025 08:30 AM ET Speaker2Morning and welcome to the General Motors Company third quarter 2025 earnings conference call. During the opening remarks, all participants will be in a listen-only mode. After the opening remarks, we will conduct a question and answer session. We are asking analysts to limit their questions to one and a brief follow-up. To ask a question, press star, then one on your telephone keypad to join the queue. To withdraw your ques ...

Ongoing operational agility and strong execution Q3 2025 Earnings October 21, 2025 C h e v r o l e t E q u i n o x C h e v r o l e t E q u i n o x E V Table of contents Page 4 Business update Page 10 2025 guidance Page 11 Financial information Page 24 Supplemental financial information C a d i l l a c E s c a l a d e General Motors 2 General Motors 2 Information relevant to this presentation G M C T e r r a i n General Motors Cautionary Note on Forward-Looking Statements This communication and related comme ...

Core Insights - Tesla Inc reported strong third-quarter deliveries that exceeded analyst expectations, but there is a notable decline in demand for its Cybertruck model [1][5][7] Group 1: Tesla's Performance - Tesla's unit sales in the U.S. reached 179,525 in the third quarter, reflecting a 7.5% year-over-year increase [5] - The company holds a market share of 43.2% in the U.S. for 2025, although year-to-date sales are down 4.3% [5] - The Model Y saw a 29% year-over-year increase in sales, totaling 114,897 units, while the Model X gained 7.6% with 3,592 units sold [6] Group 2: Electric Vehicle Market Trends - U.S. electric vehicle sales hit a record 438,487 units in the third quarter, up 29.6% year-over-year and 40.7% quarter-over-quarter [3] - Electric vehicles accounted for 10.5% of all new vehicle sales in the U.S. during the third quarter, marking a record share [3] Group 3: Competitive Landscape - Tesla's Cybertruck was the only major electric pickup truck to experience a decline in sales, with 5,385 units sold, down 62.6% year-over-year [8] - Other electric pickup trucks, such as the Ford F-150 Lightning and General Motors' Silverado, saw significant year-over-year sales increases of 39.7% and 97.5%, respectively [8][9] - General Motors' Chevrolet Equinox experienced a remarkable 156.7% year-over-year sales increase, indicating strong competition in the electric vehicle market [7]

Core Insights - Ford Motor Company's Explorer SUV remains a popular choice among U.S. consumers, ranking as one of the most common vehicles on American roads in Q2 2025 [1][8] - The Ford Explorer is the 10th most prevalent vehicle in the U.S., accounting for 1.2% of all vehicles, while the Ford F-150 leads the market with a 3.7% share [2][8] - Ford holds the top position among automotive brands in the U.S. with a market share of 14.6%, and ranks second overall among manufacturers with 15.6% of all vehicles [3][4][8] Market Performance - General Motors sold 2.2 million vehicles in the U.S. in the first nine months of 2025, achieving a market share of 17.2%, the highest since 2015 [5] - Tesla leads the U.S. electric vehicle market with a 43.1% share as of September 2025, although this is a decline from 49% at the end of the previous year [6] Financial Metrics - Ford's stock has outperformed the Zacks Automotive-Domestic industry, with a year-to-date gain of 20.4% compared to the industry's 13% [7] - The company appears undervalued with a forward price/sales ratio of 0.29, significantly lower than the industry's 3.48 [10] - The Zacks Consensus Estimate for Ford's EPS has increased by a penny for 2025 and by 5 cents for 2026 over the past 60 days [11]

Core Insights - Ford's $5 billion investment in the "Ford Universal EV Platform and Ford Universal EV Production System" signifies a strong commitment to electric vehicles (EVs) and aligns with CEO Jim Farley's long-term strategy [1][2] - The investment reflects the growing market share of EVs in the automotive industry, indicating a shift in focus among major car manufacturers [4][6] Investment Implications - Ford's focus on affordability and cost of ownership highlights the importance of reducing the upfront cost of EVs, which is seen as an opportunity rather than a challenge [5][6] - The planned introduction of a midsize four-door electric pickup with a starting price of approximately $30,000 by 2027 emphasizes the potential for capturing market share through lower upfront costs [6][8] Competitive Landscape - Ford's investment underscores the necessity for automakers to engage in EV production to remain relevant in the automotive market, especially as Tesla currently dominates with a 46% share of the U.S. EV market [9][10] - Despite Ford's significant investment, it currently sells nearly seven times fewer EVs in the U.S. compared to Tesla, indicating a substantial gap that needs to be addressed [9][10] Market Dynamics - The total cost of ownership for EVs can be significantly lower than that of internal combustion engine (ICE) vehicles, suggesting that reducing upfront prices could lead to increased sales volumes [7][8] - The automotive industry is entering a cycle where lower production costs can lead to lower prices and higher sales, a strategy that Ford is actively pursuing [8] Future Considerations - While Ford's decision to invest in EVs is seen as necessary, the company's past performance, including a $5 billion loss in its Model e segment, raises questions about the effectiveness of this strategy [13][14] - The competitive advantage held by Tesla, which is further enhanced by its scale and brand recognition, presents a challenge for Ford as it seeks to establish itself in the EV market [14]

Group 1 - General Motors Company (NYSE:GM) reported a strong first half of 2025, with total revenue reaching $91 billion, and North America revenue hitting a record $77 billion [2][3] - The Chevrolet Equinox gained nearly 6 points of retail market share year over year, indicating growth in both the U.S. and Chinese markets [2] - General Motors' electric vehicle (EV) portfolio is becoming increasingly significant, with Chevrolet ranking as the second EV brand and Cadillac in the fifth position [2] Group 2 - On August 28, 2025, CEO Mary Barra sold 994,863 shares of GM stock, valued at approximately $57.9 million, which constituted about 40% of her directly owned shares [3] - The sale of shares by the CEO has sparked market debate despite the company's strong Q2 results [3] - Insider Monkey reported that 71 hedge funds held stakes in General Motors, indicating strong institutional confidence in the company's growth [3]

Core Insights - The industry's brand loyalty rate declined to 51.1% in the first half of 2025, down 1.4 percentage points from the same period in 2024, indicating ongoing volatility in loyalty trends post-pandemic [2][3]. Brand Loyalty Trends - More than half of all brands tracked experienced year-over-year loyalty declines of one percentage point or more, affecting both mainstream and luxury brands [3]. - The shift in loyalty rates reflects a balance between returning market volume and strong competition among brands, with households more open to cross-shopping compared to pre-pandemic levels [4]. Conquest Activity - Conquest volume increased by 7.6% among mainstream brands and 6.2% among luxury brands in the first half of 2025 compared to the same period in 2024, indicating brands that executed competitive strategies were able to capture households more effectively [4][5]. Market Dynamics - The number of households returning to the market rose by 4.2% year-over-year in the first half of 2025, marking the third consecutive year of improvement, which created more opportunities for defections as brands competed for returning customers [5]. Manufacturer Performance - General Motors led multi-brand manufacturers with a loyalty rate of 68.1%, while Ford topped all brands at 58.9%. Mini showed the highest loyalty growth, improving its rate by 4.6 percentage points year-over-year, and the Chevrolet Equinox ranked as the model loyalty leader at 42.7% [9].

Core Viewpoint - General Motors (GM) is making significant strides in its investments in brands and electric vehicles (EVs), which is positively impacting its business performance and stock buybacks [1][2]. Investment in Brands - Chevrolet has emerged as the No. 2 selling EV brand in the U.S. during the second quarter, showcasing the effectiveness of GM's investments [2]. - The Chevrolet Equinox EV has been a standout model, achieving record sales in July and contributing to a 115% increase in GM's total EV sales compared to the previous year [3][4]. Sales Performance - The Equinox EV's sales reached over 8,500 units in July, accounting for nearly half of GM's total EV sales of approximately 19,000 units for that month [3]. - Chevrolet recorded its best first-half sales since 2019, with a 9% increase, driven by strong performance in its crossover lineup, particularly the Equinox [5]. Technological Advancements - GM's engineers achieved a new industry milestone with the Chevrolet Silverado EV, reportedly traveling 1,059.2 miles on a single charge, surpassing the previous record held by Lucid Air Grand Touring [7]. - The Silverado EV's efficiency was measured at 4.9 miles per kilowatt-hour (kWh), slightly below Lucid's 5 miles/kWh, but the achievement highlights GM's advancements in EV technology [8]. Overall Implications - While Chevrolet is a key brand, GM's overall investment strategy and brand management indicate a complex and potentially lucrative investment opportunity in the automotive industry [9].

Financial Data and Key Metrics Changes - The total company revenue for the first half reached a record $91 billion, driven by strong demand and stable vehicle pricing [24] - Adjusted EBIT for the quarter was $3 billion, down $1.4 billion year over year, primarily due to a net tariff impact of $1.1 billion [32][33] - Adjusted automotive free cash flow was $2.8 billion, down $2.5 billion year over year, mainly due to tariff payments and lower dealer inventory levels [33] Business Line Data and Key Metrics Changes - North America revenue was nearly $77 billion for the first half, slightly up year over year, with U.S. market share reaching 17.3%, a 1.2 percentage point increase [25][28] - The Chevrolet Equinox saw total sales rise more than 20% compared to the same period last year, gaining nearly six points of retail market share year over year [10][28] - GM International delivered second quarter adjusted EBIT of $200 million, an increase of $150 million year over year, driven by improved profitability from China [39] Market Data and Key Metrics Changes - In China, GM reported its second consecutive quarter of year-over-year sales growth, being the only foreign OEM to gain market share [7][8] - The U.S. automotive industry saw a spike in demand due to tariff-related sales pull ahead, particularly in April and May, before normalizing in June and July [8] Company Strategy and Development Direction - The company aims to grow its U.S. manufacturing footprint and domestic supply chain while strengthening its international business and innovating in batteries, software, and autonomous technology [6][7] - A $4 billion investment in U.S. assembly plants will add 300,000 units of capacity for high-margin vehicles, helping to reduce tariff exposure and meet customer demand [16][19] - The company is focused on improving EV profitability through new battery chemistries and lighter vehicle architectures [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to adapt to new trade and tax policies, with a focus on long-term profitability in electric vehicle production [6][19] - The guidance for EBIT adjusted remains in the range of $10 billion to $12.5 billion, with EPS diluted adjusted expected between $8.25 and $10 per share [40] Other Important Information - The company has booked $4 billion of deferred revenue from software services, which will be recognized over time [13] - The projected Super Cruise revenue is expected to exceed $200 million in 2025 and more than double in 2026 [14] Q&A Session Summary Question: Can you walk through the accounting for the $600 million related to EVs? - The adjustment reflects potential losses on inventory due to market expectations and pricing pressures, which is expected to improve as inventory stabilizes [50][52] Question: What would be the impact if tariffs with key countries were reduced? - A reduction in tariffs would have an immediate positive impact, and the company expects to offset at least 30% of the tariff impact through strategic actions [54][56] Question: How do you reconcile pricing assumptions for the second half? - The company maintains a pricing assumption of a 0.5% to 1% increase for the year, despite challenges in fleet pricing due to increased competition [63][66] Question: What is the strategy for EV profitability given regulatory changes? - The company is focused on improving EV profitability through battery technology advancements and lighter vehicle designs, while also maintaining a diverse EV portfolio [70][73] Question: How will tariff impacts evolve beyond this year? - The company anticipates that tariff costs may decrease as trade deals are finalized and production adjustments are implemented [80][82]