24/7 Wall St. Insights

• General Motors Co. (NYSE: GM) third-quarter U.S. vehicle deliveries were a disappointment.
• Weak electric vehicle (EV) sales and rising labor costs were to blame.
• Also: Dividend legends to hold forever.

General Motors Co. (NYSE: GM) announced its third-quarter U.S. vehicle deliveries. Unfortunately, they were down year over year. Most of the press said electric vehicle (EV) sales were strong because they rose by double-digit percentages. In reality, they were less than 5% of total deliveries, which was too small to matter.

GM’s deliveries for the third quarter totaled 659,601, which was a 2% decline from the third quarter of 2023. EV deliveries rose 60% year over year, but they only hit 32,095. That is 356 a day nationwide.

It is clear from its announcement that GM faces the same struggles as Volkswagen and Stellantis, based on comments about the worsening financial conditions of the two European-based companies. After billions of dollars of investments in EVs, there is almost no market for them. In fact, except for in China, the EV sector is in trouble.

EVs face challenges that have been pointed out many times before. There are too few charging stations. The battery range is too short. EVs cost, in general, more than gasoline-powered cars. They eat through tires too quickly. They take less than a total battery charge in cold weather.

GM has retreated to its highly successful business. This is the gasoline-powered vehicle it has built for over a century. Their hybrids have some interest, but they sell these in small numbers.

Finally, labor costs are rising. A 2% drop in deliveries year over year in a quarter seems modest, but that number needs to be better.

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