GM Stock Falls Over 50% as Sales Plunge

By Douglas A. McIntyre Published Jul 7, 7:30AM EDT

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GM Stock Falls Over 50% as Sales Plunge — © conejota / Getty Images

General Motors Co. (NYSE: GM | GM Price Prediction) reported that its sales in China, the largest market in the world, fell 35.5% in the second quarter to 484,200. China sales are absolutely critical to GM’s health and were a strong point until recently.
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GM’s comment about July sales was not comforting. “In the meantime, GM is continuing its pivot to a platform innovator. Following the Cadillac LYRIQ, Ultium-based EVs from Buick and Chevrolet will make their debut in China in the second half of this year.” It is unclear what a “platform innovator” is.
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GM’s stock has suffered horribly. From a 52-week high of $67.21, it has fallen to near $32. The company’s market value has lost almost $50 billion.

Despite constant comments about how its electric vehicle development makes progress, it remains very far behind market leader Tesla. Rival Ford has launched its F-150 Lightning. Ford has millions of F-150s on the road, which means the universe of possible buyers is huge.

GM’s competition in the EV market is not limited to Ford and Tesla. Every major car company in the world has spent or will spend billions of dollars on EV development and production. A KPMG study showed car executives expect half their sales to be EVs in 2030.
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GM’s sales in its home market are nearly as troubling as those in China. Last year, Toyota sold more cars in the United States than GM did. GM has held the lead since 1931. GM regained the lead this year, but not by much.

GM’s shares made a long and steady climb from mid-2017 to early this year. The recent sell-off has wiped out those gains.
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GM can argue some of the decline in its stock is due to a sharp fall in the stock market. However, that explanation is not enough. GM is not considered a leader in EVs, which are the future of cars worldwide. Not every large car company will have a large market share in this sector. GM is at risk of being one of the laggards.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.