The race for 2nd place $GM $F $TSLA

Expectations are relatively lofty for GM heading into this report. The company's stock is up +65% YoY but remains well below pandemic highs.

In reality, GM is locked in a tight race for second place in the EV market as it battles Ford and Hyundai/Kia to catch up with dominant player, Tesla.

It is distinguishing itself by bringing BIG vehicles to the EV market, including its Chevy Silverado EV, GMC Hummer EV, GMC Sierra EV, and even a luxury Cadillac Lyriq -- all of which are gaining attention from US consumers -- especially the Hummer.

According to data reported to CNBC, GM’s EV sales through August surged 70% year-over-year, up from around 35,000 units sold during the same period last year. GM is narrowing the gap with Ford, trailing by just 2,000 units as Ford sold 61,366 EVs while GM reached 59,303 units. However, GM still trails Hyundai/Kia, which sold 83,643 EVs, maintaining a lead of over 20,000 units.

Early data looks promising on the consumer front at large. LikeFolio data shows serious traction in consumer interest, with web visits up +20% YoY and accelerating over the last month.

Looking ahead, GM anticipates strong EV adoption in the fourth quarter, expecting to exceed its previous quarterly sales of 22,023 units. The current lineup includes eight Ultium-based EVs, with two additional models, including the electric Escalade and Optiq crossover, set to launch by year’s end, bringing the total to 10.

The Ultium platform uses modular battery configurations, enabling GM to tailor battery sizes and shapes for various designs while maximizing energy density and cost efficiency. Some models offer over 400 miles of range with fast-charging capabilities that can add up to 100 miles of range in just 10 minutes. The system also supports front-wheel drive, rear-wheel drive, and all-wheel drive setups, allowing GM to use the platform for everything from compact cars to large trucks.

This proprietary battery platform is a critical part of GM's transition to an all-electric lineup by 2035, with its standardized components helping reduce production costs and speed up development.

The batteries use nickel, cobalt, manganese, and aluminum chemistry, engineered to reduce the expensive cobalt content and drive down costs. 

Growth in the EV sector isn't the only potential tailwind.

GM CEO Mary Barra stated earlier this month that profit margins on traditional gas-powered vehicles had not yet peaked as EV sales were gaining momentum.

In addition, we already know that GM saw some improvement in its China business over the last quarter, logging +14.3% growth, the highest rate since the third quarter of 2022.

Sounds like sunshine and roses, right?

If you play this to upside like we are, stay risk defined. Though our signal is bullish and we expect a strong performance, last quarter GM shares fell -6% after very nice earnings on fears its earnings power had peaked. 

GM delivered 696,086 vehicles in the US in the second quarter, up 0.6% YoY, its best since the fourth quarter of 2020, driven by strength in full-sized pickups alongside solid EV performance.

If we do see a pullback on a solid report, we're buyers of a dip.