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Transition

General Motors Navigates Challenges, Sees Bright Spots in 2024 General Motors ( NYSE:GM ) is making headlines after a roller-coaster ride in the fourth quarter of 2023, marked by a 9.50% surge in premarket trading on Tuesday. Despite a 41.5% decline in adjusted earnings and a slight drop in revenue, the automotive giant's positive outlook for 2024 and strategic moves have caught the attention of investors. We'll delve into the key factors shaping GM's current trajectory and explore what lies ahead for the company. Q4 Performance and Hurdles: NYSE:GM 's Q4 report showed a 41.5% decline in adjusted earnings to $1.24 per share, the first drop in five quarters, attributed to factors such as unsold electric vehicles and a 40-day strike. However, these results were less severe than expected, with FactSet analysts predicting a 45% decline to $1.16 per share. The impact of unsold EVs led to a $1.6 billion charge, and an additional $800 million charge was tied to the recall of Chevy Bolt batteries. Promising U.S. and China Deliveries: Despite the challenges, NYSE:GM delivered 2.6 million vehicles in the U.S. during 2023, boasting a 14% YoY increase. The company claimed a 16.2% total market share in the United States for 2023. Furthermore, NYSE:GM and its joint ventures delivered 2.1 million cars to China, underlining the global reach of the automaker. Strategic Moves and Shareholder Returns: NYSE:GM 's management outlined a positive outlook for 2024, emphasizing a resilient U.S. economy and continued demand for vehicles. The company aims to capitalize on strong demand for combustion trucks and SUVs in North America, cost-cutting initiatives, and the increasing sales of its new generation of electric vehicles. In a bid to reward shareholders, NYSE:GM has already returned $12 billion in 2023 through a $10 billion share buyback and a 33% dividend increase. The company pledged to "consistently return excess free cash flow to shareholders" and outlined a forecast of adjusted pre-tax profits in the range of $12 billion to $14 billion for 2024. Electric Vehicle Focus: NYSE:GM is banking on the growing popularity of electric vehicles, with plans to increase overall EV sales to 10% of the U.S. market in 2024, up from 7% in 2023. The company's Chief Financial Officer, Paul Jacobson, expressed confidence that GM's electric vehicle operations would start generating variable profit by the second half of the year. Cruise Unit Challenges and China Market Dynamics: While NYSE:GM faces challenges in its Cruise robo-taxi unit, marked by a $1 billion spending cut and an external law firm's report faulting Cruise management's response to an incident, the company aims to refocus and relaunch Cruise. Meanwhile, in China, NYSE:GM acknowledges deepening challenges with domestic automakers and Tesla gaining share. The company expects a loss for the current quarter in the Chinese market. Conclusion: General Motors' ( NYSE:GM ) journey through Q4 2023 reflects a mix of challenges and promising innovations. As the automotive industry undergoes transformative shifts towards electric vehicles, NYSE:GM 's strategic moves and positive outlook for 2024 position the company for a dynamic year ahead. Investors will be watching closely as NYSE:GM navigates the evolving landscape, capitalizing on strengths and addressing challenges to drive future growth.
NYSE:GMLong
by DEXWireNews
Thematics Outlook The future is green and highly connected“We tell ourselves stories in order to live”, Joan Didion (writer and journalist). Thematic investing brings this notion to the fore. Avenues of investing aligned with megatrends are inherently predicated on visions of the future. But what makes thematic investing a lot more palatable than prophesising is that certain megatrends are already in motion. Thematic investors, therefore, need only observe the direction of the current and swim with the tide. The stories they tell themselves reveal what places they will witness along the way. But, of course, timing does matter and the bear market in 2022 has created an attractive entry point for long-term investors. Moreover, the investment industry now offers discerning investors ways to access differentiated themes aligned with unique megatrends. For investors, this means more stories to choose from and two themes appear especially interesting at the present juncture. The future is green – the inevitable energy transition Following 18 months of intense wrangling, the US has passed a $700 billion economic package deemed by many as a monumental step in tackling climate change. The bill includes $369 billion for climate action including tax credits for households to buy electric vehicles and support for renewable energy, carbon sequestration research, hydrogen power, and small-scale nuclear reactors1. Creating an energy sector that is both sustainable and sufficient will require major investment across all forms of clean energy including renewables, hydrogen, biofuels, hydro, and even nuclear. Most recently, the European parliament has moved to classify future investment in natural gas and, more notably, nuclear power as environmentally sustainable (under certain conditions) in a pivotal shift recognising the need for an ‘all of the above’ approach to phasing out fossil fuels. Low hanging fruit The energy sector accounts for around three quarters of global greenhouse gas emissions with road transportation accounting for the largest share at 11.9%2. It therefore makes sense to start where most progress can be made and can have the greatest impact. According to Bloomberg New Energy Finance’s Long Term Electric Vehicle (EV) Outlook 2022, the EV market represents an $82 trillion market opportunity between now and 2050 in a net zero scenario. This is on account of not just the vehicles but the ecosystem of industries surrounding them, which includes battery technology, commodities, charging infrastructure, and recycling to name a few. No half measures The electrification of road transportation could create a 27% increase in electricity demand by 20503. It is therefore crucial that the electricity itself is also clean. Among renewables, offshore wind is all the rage right now - and for good reason. According to Wood Mackenzie, almost $1 trillion is expected to flow into the offshore wind market over the next decade, given its scalability. But more renewable power will also require more energy storage. Battery technology again comes into play. Lithium-ion batteries, effective for shorter duration storage, will be complemented by emerging longer duration storage technologies. This will ensure the energy supply is not only reliable for a few hours, but days and weeks. The future is highly connected – the ongoing digital transition According to Statista, the number of internet of things (IoT) connected devices worldwide rose from 8.6 billion in 2019 to 11.3 billion in 2021 and will likely reach 29.4 billion by 20304. The world is becoming increasingly connected, and there are many facets to it. Every cloud has a silver lining The world has shifted quickly from renting cassettes and DVDs to cloud-based streaming services which use artificial intelligence to offer a personalised experience. Video streaming is not just occupying our television screens. It dominates our mobile phone usage as well. According to Ericsson, global mobile data traffic has risen from 10.9 exabytes (EB) in 2017 to 90.4 EB in 2022 and expected to reach 282.8 EB by 2027 with video being the primary driver of this data binging Gartner forecasts that public cloud end user spending will grow by 20.4% in 2022 to 494.7 billion, up from 410.0 billion in 2021. This number will reach nearly $600 billion in 20235. Now, for end users sitting in their homes streaming content, movies, and TV shows, everything may be in the ‘cloud’. But for YouTube, Netflix, and Spotify this data needs to be physically stored somewhere. The explosion in data usage will require more data centres and ever-increasing internet speeds. For investors looking at cloud computing as a megatrend, the opportunity is not just in the software, but also the real estate that provides the necessary infrastructure. This megatrend is not optional If a business hastens to shift to the cloud, collect all the necessary user data to improve its service, but then bungles it all up by falling victim to a cyber-attack, the result could be catastrophic. More connectedness means more points of vulnerability for the nefarious types to exploit. Cybersecurity Ventures expect global annual cybercrime costs to reach $10.5 trillion by 2025, up from $3 trillion in 2015. As a consumer of any product or service, cybersecurity is something you never want to hear about. If everything is in order, nothing happens. But that is only possible if businesses ensure robust guardrails are in place. Cybersecurity, therefore, is a megatrend that is not optional, but mandatory. It is what makes a connected world sustainably possible. But what about the risks? Yes, further hawkishness from central banks could create more turbulence. Nevertheless, monetary policy shouldn’t alter the direction of travel. So, keep an eye on those inflation prints and the response from central banks. Deglobalisation can also pose a challenge, especially for the energy transition which depends on certain commodities. Supply chains span across the globe and a coordinated effort to tackle climate change would be more fruitful than a fragmented one. Conclusion The protagonists will change, the antagonists will change, and there will be unforeseen twists and turns. And for each investor, the plot may thicken somewhat differently. But the stories are underway. And now is an excellent time for investors to not only observe that the world is becoming greener and more connected but help drive the change they want to see. Sources 1 Source: Financial Times 8 August 2022. 2 Our World in Data based on 2020 figures. 3 Bloomberg New Energy Finance Long Term Electric Vehicle Outlook 2022. 4 Source: Statista in cooperation with Transforma Insights, May 2022. 5 Source: Gartner April 2022.
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by aneekaguptaWTE