Core Insights - Legacy automakers are transitioning from reliance on vehicle sales to developing software and subscription ecosystems, which provide higher-margin, recurring revenue streams [1] General Motors - General Motors is building a software and subscription ecosystem centered around OnStar, which reached a record 12 million subscribers, including over 120,000 Super Cruise subscribers, reflecting approximately 80% year-over-year growth [2][3] - OnStar generates subscription-based revenues, creating more stable cash flow, with management expecting software and services revenues to increase by about $400 million this year and deferred revenues projected to reach $7.5 billion, up roughly 40% year-over-year [3] - GM plans to expand its Super Cruise system and introduce a second-generation software-defined vehicle architecture in 2028, which will enhance over-the-air capabilities and support advanced driving features [4][5] Ford - Ford is focusing on commercial customers through its Ford Pro unit, offering tools and services that enhance fleet operations [6] - Paid software subscriptions grew by 30% in 2025, with total paid subscriptions surpassing 1.3 million, up 53% year-over-year [7] - Software and physical services now account for 19% of Ford Pro's EBIT, with high-margin software gross margins above 50%, indicating potential for significant growth [8][9] Tesla - Tesla's software strategy emphasizes Full Self-Driving (FSD) with a shift to subscription-based monetization, as monthly subscriptions to FSD more than doubled in 2025 [12][15] - The transition to subscription-only for FSD aligns with Tesla's long-term financial goals, providing steady cash flow compared to one-time purchases [13] - Tesla aims to reach 10 million active FSD subscriptions over the next decade, with significant incentives tied to this metric for CEO Elon Musk [14]

Core Insights - General Motors (GM) outperformed Ford in 2025, achieving its highest market share in a decade at approximately 17%, while Ford ended the year with a market share of 13.2% [3][8] - Both companies are facing challenges in electric vehicle (EV) demand and high tariffs, but they continue to invest in innovation and technology [2][6] - GM's software and services business is becoming a significant profit driver, with deferred revenues expected to reach $7.5 billion by the end of 2026, a nearly 40% increase from 2025 [4] - Ford's focus on affordable EVs and its Ford Pro and Energy platforms positions it for diversified growth, with a projected EBIT of $8-$10 billion in 2026 [7][9] General Motors (GM) Summary - GM expects North America EBIT margins to improve to 8-10% in 2026, up from 6.8% in 2025, driven by lower costs and a stronger product mix [3] - The company repurchased $6 billion in shares and paid over $500 million in dividends in 2025, with a new $6 billion buyback program approved [5] - GM incurred $7.6 billion in EV-related charges in 2025 due to weaker demand and tax incentive changes, with expectations of smaller charges in 2026 [6] Ford Summary - Ford's Ford Pro division saw a 30% growth in paid software subscriptions in 2025, and the company plans a $1.5 billion investment in its Energy platform [9] - The company anticipates a significant reduction in tariff costs to about $1 billion in 2026, easing some financial pressure [11] - Ford's high dividend yield of over 4% is attractive for income-focused investors, and the company is restructuring its EV business to focus on affordability [10] 2026 Outlook: GM vs. Ford - GM projects adjusted EBIT of $13-$15 billion in 2026, with automotive operating cash flow expected to rise to $19-$23 billion [13] - Ford expects adjusted EBIT of $8-$10 billion, with free cash flow improving to $5-$6 billion [12] - Both companies are seen as investor-friendly, with GM focusing on buybacks and dividends, while Ford emphasizes high-yield payouts and disciplined capital allocation [20] Valuation Perspective - Ford currently appears more attractive from a valuation standpoint, particularly on a price-to-sales basis, suggesting potential upside for investors [17] - Consensus estimates favor Ford, projecting stronger year-over-year earnings growth for both the current and next fiscal year [21]

Key Takeaways OnStar hit 12M subscribers in 2025, with Super Cruise up 80% YoY, boosting GM's recurring revenues.GM expects software and services revenues to rise $400M in 2026, with deferred revenues reaching $7.5B.Second-generation vehicle architecture in 2028 will expand OTA capacity and support hands-off driving.When investors think about General Motors (GM) , they usually focus on trucks, SUVs, or electric vehicles (EVs). But beyond vehicles, this auto giant is expanding its software and subscription e ...

Core Viewpoint - General Motors (GM) is experiencing strong performance driven by robust vehicle offerings, a growing software and services business, and restructuring efforts in China, alongside a revised electric vehicle (EV) strategy to address slower adoption rates [1] Stock Performance - Over the past six months, GM shares have increased by approximately 42%, outperforming industry peers such as Ford, which rose by 22%, and Stellantis, which declined by 21% [2] Market Position and Strategy - In 2025, GM became the top-selling automaker in the U.S., achieving a market share of around 17%, marking its fourth consecutive year of growth [6] - GM has adjusted its strategy in response to slower EV demand, selling its stake in the Ultium Cells Lansing plant and reallocating assembly capacity from EVs to internal combustion engine vehicles, incurring $7.6 billion in charges to reduce EV capacity [7] Financial Outlook - GM anticipates North America EBIT margins to be in the range of 8-10% for 2026, an increase from 6.8% in 2025, driven by lower costs and a better product mix [8] - The company expects net income for 2026 to be between $10.3 billion and $11.7 billion, with adjusted EBIT projected at $13 billion to $15 billion [13] Software and Services Growth - GM's software and services business is becoming a significant profit driver, with OnStar reaching 12 million subscribers and Super Cruise subscribers growing by nearly 80% year-over-year [9] - Deferred revenues from software and services are expected to rise to about $7.5 billion by the end of this year, nearly 40% higher than 2025 levels [9] Capital Investment and Shareholder Returns - Over the past two years, GM has invested more than $20 billion in capital projects, with plans to spend $10-12 billion annually in 2026 and 2027 [11] - GM has returned $23 billion to shareholders since late 2023, including $6 billion in share repurchases and over $500 million in dividends in 2025 [12] Valuation and Market Sentiment - GM stock is currently trading at a forward P/E ratio of 6.48, lower than Ford's 9.06 and Stellantis's 4.32, indicating it may be undervalued [15] - The consensus price target for GM stock is $92.24, suggesting an upside of more than 13% from current levels [19]

January 30, 2026 05:10 PM GMT Autos & Shared Mobility | North America Global Auto Monitor: The Era of Abundant Autonomy Is Upon Us After TSLA and GM earnings, autonomy looks less like a moonshot and more like a roadmap. Tesla sunsets S/X to prioritize robotaxi and Optimus, while GM pairs strong 2026 guidance and buybacks with a growing Super Cruise software base. What Others Are Reading - Our Most Read Reports [NORTH AMERICA] Exit Model X/S, Enter Robots: PT to $415 (29 Jan 2026) The wind down of Model X/S ...

Core Viewpoint - General Motors reported strong profitability and provided a better-than-expected outlook, despite missing revenue expectations in the fourth quarter [1][2]. Financial Performance - GM's adjusted EPS of $10.60 exceeded the high end of its own guidance range, and EBIT and automotive free cash flow were better than expected, even after accounting for one-time charges related to its EV strategy [5][6]. - The company announced a 20% increase in the quarterly dividend and a new $6 billion share repurchase authorization, which represents about 8% of its outstanding shares at the current price [6]. Future Outlook - Management's initial guidance for 2026 projects earnings of $11 to $13 per share, indicating a potential 13% growth over 2025 [7]. - CEO Mary Barra highlighted that improvements in battery technology will enable quicker profitability for electric vehicles, with EV sales increasing by 48% year over year [8]. - The company anticipates a 40% rise in deferred revenue from software and services to $7.5 billion by 2026, which are high-margin revenue streams [9]. Competitive Position - GM's stock has risen over 50% in the past year but remains relatively cheap, trading at just 7 times the company's 2026 EPS guidance [11]. - The company is executing its electric vehicle strategy effectively, showing a clear path to profitability, and plans to launch advanced features like eyes-off autonomous driving by 2028 [12]. Investment Potential - GM's strong performance and future growth prospects make it a significant position in investment portfolios, with expectations for continued upside potential [13].

Core Viewpoint - General Motors (GM) is predicted to reach a stock price of $200 by the end of 2030, requiring a 130% increase from its current price of approximately $87, translating to an annual growth rate of about 18% [1][2]. Group 1: Stock Valuation and Performance - GM currently trades at about seven times forward earnings, indicating a potential undervaluation given the company's strong performance and ongoing buybacks [2]. - The company has demonstrated resilience during economic downturns, such as the pandemic and inflation surge, suggesting a strong growth outlook [4]. Group 2: Catalysts for Growth - Major catalysts for GM's stock price increase include continued buybacks, which could reduce the outstanding share count by approximately 8% this year, potentially leading to a one-third reduction by 2030 [5]. - The electric vehicle (EV) segment, while currently unprofitable, is expected to achieve profitability sooner than anticipated, supported by CEO Mary Barra's insights on EV adoption trends [5]. - GM's software revenue, particularly from services like OnStar and Super Cruise, is projected to grow by 40% to $7.5 billion this year, representing a high-margin revenue stream that could significantly enhance profitability [5].

Core Insights - General Motors (GM) is significantly expanding its software and subscription business, generating $2 billion in software revenue over the past nine months and securing $5 billion in future subscriptions from customers [1][2]. Subscription Growth - GM has reached 11 million subscribers for its OnStar safety system, marking a 34% increase from the previous year, and an additional 500,000 customers are subscribed to the Super Cruise hands-free driver-assistance system [2][4]. - The subscription services, while currently a small portion of GM's total revenue of $45.29 billion in the last quarter, offer higher profit margins compared to traditional car sales [2][3]. Profitability and Strategy - GM's software business retains approximately 70 cents of every dollar earned, a notable profitability level in the auto industry where car sales typically yield only 4 to 10 cents per dollar [3]. - The company plans to enhance its software and services, such as OnStar and Super Cruise, to drive greater revenue during and after vehicle sales, indicating a strong growth opportunity with attractive margins [3][4]. Software-Defined Vehicles - As vehicles become more software-defined, GM aims to introduce new digital experiences through updates and optional services rather than relying solely on hardware changes [5][6]. - The subscription model is designed to ease customer adoption, with OnStar Basics included at no extra cost for newer GM vehicles, while paid subscriptions for services like Connect Plus and Super Cruise are available at monthly rates [6][7]. Competitive Landscape - Other automakers, including Ford and Tesla, are also expanding their subscription services, indicating a broader industry trend towards monetizing software and services post-sale [8][9]. - Wall Street responded positively to GM's earnings report, with the company's stock rising 8.8% following the announcement, reflecting investor confidence in the subscription model's potential [9][10].

Financial Data and Key Metrics Changes - The company reported total revenue of $45 billion for Q4 2025, down approximately 5% year-over-year, primarily due to disciplined production and dealer inventory management [19] - EBIT adjusted was $12.7 billion for the full year, with adjusted automotive free cash flow of $10.6 billion, resulting in a year-end cash balance of $21.7 billion [16][19] - The company achieved a total return of 54% for investors in 2025 [5] Business Line Data and Key Metrics Changes - North America delivered EBIT adjusted of $2.2 billion with margins of 6.1% [23] - GM Financial's full-year EBIT adjusted was $2.8 billion, within guidance, and paid dividends of $1.5 billion to GM [25] - The company led the industry in full-size pickups and SUVs, with strong performance in crossovers [5][7] Market Data and Key Metrics Changes - The U.S. market share reached its highest level in a decade, marking the fourth consecutive year of market share growth [5] - New energy vehicle sales in China reached nearly 1 million units in 2025, representing over half of total sales in the region [25] - The company expects total U.S. SAAR to be in the low 16 million unit range for 2026 [27] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet while investing in growth, with planned capital expenditures of $10-$12 billion annually [17][27] - The strategy includes onshoring production to meet demand for internal combustion engine (ICE) vehicles and enhancing supply chain resiliency [31] - The company is committed to EVs, with plans to reduce costs and improve profitability through new technologies and operational efficiencies [9][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving EBIT adjusted margins in North America of 8%-10% in 2026, supported by improved EV profitability and warranty expense trends [32] - The company anticipates a benefit of $1 billion-$1.5 billion related to right-sizing EV capacity [29] - Management acknowledged uncertainties in the regulatory environment but remains optimistic about future cash flows and profitability [32] Other Important Information - The company incurred $3.1 billion in gross tariff costs for 2025, which was below the predicted range [21] - The company plans to increase its quarterly dividend rate by 20% and has authorized a new share repurchase program of $6 billion [19][18] - The company is expanding its Super Cruise business into international markets and expects to grow OnStar services significantly [10][32] Q&A Session Summary Question: Pricing Assumptions - Management indicated that pricing is expected to be flat to up, primarily reflecting the annualization of 2025 pricing without significant increases planned [37][38] Question: Product Portfolio Dynamics - Management confirmed that the current portfolio is well-positioned, with a strong ICE lineup and plans for hybrid vehicles in key segments [40][41] Question: Inventory Discipline and Cash Flow - Management stated that inventory discipline will continue, contributing to stronger cash generation, with no significant buildup anticipated [47][48] Question: Industrial Bank Approval Impact - Management highlighted that the Industrial Bank will provide a complementary funding source, potentially lowering the cost of funds [51][52] Question: EV Volume Declines and ICE Demand - Management noted uncertainty in EV demand but is prepared to maximize ICE production to meet market needs [90][92] Question: North America Margin Guidance - Management clarified that the North America margin guidance reflects improvements in EV profitability and regulatory costs, contributing to overall EBIT expectations [78][80] Question: Memory Chip Supply and Pricing - Management confirmed that there are no current issues with memory chip supply, and the team is actively managing the situation [82][83]

Financial Performance - GM reported revenue of $185.0 billion for CY 2025[39], and $45.3 billion for Q4 2025[43] - The company's EBIT-adjusted was $12.7 billion for CY 2025[39], with a margin of 6.9%[39], and $2.8 billion for Q4 2025[43], with a margin of 6.3%[43] - Adjusted automotive free cash flow was $10.6 billion for CY 2025[39] and $2.8 billion for Q4 2025[43] - EPS-diluted-adjusted was $10.60 for CY 2025[39] and $2.51 for Q4 2025[43] Sales and Market Share - GM achieved 1 in total U S sales with 2.9 million deliveries in CY 2025, up 6% year-over-year[12, 109] - U S market share grew by 0.6 percentage points to 17.2% in CY 2025[12] - Global deliveries increased by 0.2 million year-over-year to 6.2 million units in CY 2025[47] Strategic Initiatives and Investments - GM invested $9.2 billion in capital projects and repurchased $6.0 billion of stock in CY 2025[13] - Deferred revenue from OnStar services was $5.4 billion at the end of 2025, up 65% year-over-year[22] - The company expects EV losses to improve by $1.0-1.5 billion due to right-sizing EV capacity[34] 2026 Guidance - GM projects EBIT-adjusted to be in the range of $13.0-15.0 billion for 2026[34] - Adjusted automotive free cash flow is expected to be $9.0-11.0 billion for 2026[34] - EPS-diluted-adjusted is guided to be $11.00-13.00 for 2026[34]