As the race for electric vehicle supremacy looks set to heat up throughout 2022, General Motors unveils two new offerings to the market.
Jan. 6, 2022
The start of 2022 saw automotive giants Tesla and Ford launch into the new year with amazing news regarding delivery numbers and total year growth respectively. General Motors (NYSE: GM), not wanting to be left out, announced plans for new electric versions of its Chevrolet Silverado yesterday.
With the company clearly aiming to take on the existing players in the electric vehicle (EV) market, what does this mean for investors?
What did General Motors actually announce?
GM announced two distinct versions of its highly lucrative Silverado line. The first will be a work truck (WT) version aimed at its fleet customers. This truck will release in the Spring of 2023 and will be priced at $39,900. This price point puts it in direct competition with Ford’s F-150 Lightning, the truck responsible for Ford’s immense success in the EV market.
The second offering from GM will be a luxury version of the same truck. The RST limited first edition model will retail for $105,000 and won’t be available until late 2023. It will offer a wide range of high-end extras such as hands-free highway driving and four-wheel steering.
Both of these announcements come as part of GM’s push to go completely electric by 2035. The Detroit-based auto manufacturer may be late to the EV game but it holds an extremely loyal consumer base and fantastic brand recognition. The company will be hoping this will allow rapid growth of its market share in the highly competitive industry.
So should I buy General Motors stock?
Investors should be pleased to see GM’s transition to the EV space. While the company did recently announce an $80,000 electric Hummer SUV, this marks its first foray into an EV offering that will be available at a more affordable price. This should greatly increase its ability to capture a wider proportion of the market.
The EV space, in particular electric trucks, is growing at an exponential rate. Ford, Tesla, and Rivian all have vehicles in production in a race to capture the market before anyone else. Despite entering the market slightly later than its biggest competitors, GM hasn’t lost too much ground. Ford and Tesla are still yet to ship their flagship trucks with only Rivian currently challenging GM’s electric Hummer. Once the electric versions of the Silverado are made available, GM will possess a variety of vehicles at multiple price points.
Investors would be remiss not to have some concerns over GM’s 2021 results. Last year marked the first time since 1931 that the company surrendered the title of the best-selling car company in the U.S. Supply chain issues and a shortage of semiconductors saw Toyota take that crown for the first time. However, GM North America President Steve Carlisle was bullish earlier this week when he stated that the company’s plans to “take advantage of the strong economy and anticipated improved semiconductor supplies to grow our sales and share.”
Overall, GM looks set to improve on its 2021 returns as it formally joins the EV industry in a meaningful way. Investors can expect the firm to leverage its brand and a strong history of sales to command a significant share of the market. The potential success of its EV offerings could lead to considerable profit for the company and its shareholders over the next five years. There will be plenty more twists and turns as the EV industry continues to grow, but I expect GM will become one of the major players in the space over the next decade.