General Motors (GM) is scheduled to report quarterly results before market open on Tuesday, July 26 with a conference call scheduled for 8:30 am EST, while Ford (F) is scheduled to report after market close on Wednesday, July 27 with a conference call scheduled for 5:00 pm EST. What to watch for:
GM SALES: In July, General Motors announced that it sold 582,401 vehicles in the United States in the second quarter of 2022 and the company increased its sales and market share sequentially for the third consecutive quarter. GM's second quarter sales were down 15% year over year, but market share was up 1 point to an estimated 16.3%, according to J.D. Power PIN. "GM's sales and market share have grown each of the last three quarters, even with lingering supply chain disruptions. Our long-term momentum will continue to build thanks to the launches of groundbreaking new EVs like the GMC HUMMER EV and Cadillac LYRIQ, and the tremendous customer response to the Chevrolet Silverado and GMC Sierra," said Steve Carlisle, GM executive vice president and president, North America, at the time. Additionally, in the second quarter of this year, GM sold more than 480,000 vehicles at retail in China, "In the face of repeated COVID-19 outbreaks, GM's brands have made every effort to ensure production and operations with strong resilience, and sales have rebounded steadily since May. The company's new energy products maintained a positive growth trend, with sales up 12.5% year-on-year... At the same time, GM is at full speed with its transformation towards platform innovators. Following the Cadillac LYRIQ, the pure electric models of the Buick and Chevrolet brands based on the Autoneng platform will also be officially unveiled in the second half of this year," GM stated at the time.
GM PARTNERSHIPS, INITIATIVES: In April, the Government of Canada announced a C$295M investment in General Motors of Canada to secure thousands of jobs across GM facilities while advancing electrification. Additionally in April, the company and Honda (HMC) announced plans to expand their relationship by codeveloping a series of affordable electric vehicles based on a new global architecture using next-generation Ultium battery technology. GM also entered a multiyear cobalt supply agreement with Glencore (GLNCY) in April and announced plans for electric Corvette. In May, the company announced a partnership with INRIX to develop safety solutions as well as a collaboration with Red Hat (IBM) on advancing software-defined vehicles. In June, the California Public Utilities Commission issued the first Phase I Driverless Autonomous Vehicle Passenger Service Deployment permit in California to GM’s Cruise subsidiary to allow for passenger service in its AVs without a driver present in the vehicle. The company also teased images of the electric Chevy Blazer in June and announces plans to offer a 2023 Corvette Z06-inspired NFT in auction. Additionally, GM announced an investment of $81M in the company’s Global Technical Center in Michigan in June and activated Plug and Charge capabilities across the EVgo (EVGO) network.
ANALYST VIEW: In July, Deutsche Bank analyst Emmanuel Rosner downgraded General Motors to Hold from Buy with a price target of $36, down from $57. Automakers will describe favorable conditions in Q2 but face growing earnings risk, Rosner said. The analyst said traditional automakers could struggle to regain investor interest amid concerns about consumer, risks to pricing, and questions about near-term profitability impact from electrification.
FORD SALES: In May, Ford reported April U.S. vehicle sales down 10.5% to 176,965 vehicles and April U.S. electric vehicle sales up 50% to 16,779 vehicles. "While industry semiconductor chip shortages persist, improved inventory flow in April delivered a significant share gain of 1.0 percentage point over a year ago with Ford outperforming the industry. Inventory flow bolstered stronger F-Series, Mustang Mach-E, E-Transit and record April Ford brand SUV sales. We are now shipping all models of the electric F-150 Lightning,” the company said at the time. In June, Ford reported May U.S. vehicle sales down 4.5% to 154,461 vehicles and U.S. electric vehicle sales up 221.5% to 6,254. "While the global semiconductor chip shortage remains an issue for the industry, our inventory continues to turn at record rates with nearly 50 percent of our retail sales coming from previously placed orders. Our newest models, including Bronco, Bronco Sport and Maverick, continue to enhance our sales volume. Our electric vehicle sales, with the addition of F-150 Lightning this month, increased 222 percent - growing at almost four times the rate of the industry,” said Andrew Frick, vice president, sales, distribution & trucks, Ford Blue. In July, Ford reported June U.S. sales up 31.5% to 152,262 vehicles and electric vehicle sales up 76.6% to 4,353 vehicles. "Amid industry-wide supply constraints, Ford outperformed the industry driven by strong F-Series, Explorer and new Expedition and Navigator SUV sales. Combined, these vehicles represented just over 56 percent of our sales in June - up about 8 percentage points from May. F-150 Lightning was America's best-selling electric truck in June in its first full month of sales, while our overall electric vehicle sales were up 77 percent over last year," said Frick, at the time. The company also reported selling 120,000 units in China in the second quarter of 2022, down 22% year-over-year.
FORD PARTNERSHIPS, INITIATIVES: In April, Ford entered into an MOU with Lake Resources (LLKKF) to negotiation lithium offtake form the Kachi Project and debuted the Lincoln Star Concept as well as plans to deliver four new electric vehicles by 2026. The company also rolled out digital solutions in Europe to enhance fleet productivity in April and announced start of full production of F-150 Lightning trucks. In May, United Rentals (URI) announced a deal with Ford Pro to purchase all-electric vehicles for its North American fleets. The company also announced in May plans to add more than 6,200 manufacturing jobs in the Midwest. In June, the company announced it had chosen its Valencia, Spain plant for next-generation EV assembly. Additionally, the company announced a collaboration with Wejo (WEJO) to leverage connected vehicle data to enable end-to-end insurance.
ANALYST VIEW: In July, Nomura analyst Anindya Das upgraded Ford to Neutral from Reduce with a $12.40 price target. Das cited Ford's year-to-date stock price correction, better-than-expected sales performance of the new Bronco and Bronco Sport, as well as easing raw material prices, especially for aluminum. However, the analyst also thinks Ford's FY23E earnings could face headwinds from a product mix deterioration for conventional ICE models and a higher mix of less profitable EVs. Additionally in July, Deutsche Bank analyst Emmanuel Rosner lowered the firm's price target on Ford to $12 from $17 and kept a Hold rating on the shares.