- GM'S annual gains have been slashed more than 10% in the last week
- The departure of Cruise CEO & Chevrolet production halt increased selling momentum
- Based on the long-term outlook, will the dip attract buyers back?
Since the start of 2021, General Motors (NYSE: GM) has risen around 30%. Unfortunately for GM buyers, gains have been slashed in the last few days following two pieces of uncorrelated news.
The automobile manufacturer is one of the many competing for a slice of the EV market share, so news that its Chevrolet Bolt will halt manufacturing wasn’t received particularly well. Furthermore, the letting-go of Dan Ammann, CEO of GM’s Cruise subsidiary sparked a sell-off late last week, with price dropping a total of 10% in the days to follow.
Problems with EV production undoubtedly spark concern in the market, companies can’t afford to slip up in times of such critical competition. GM announced today that it will be extending the production halt at its Orion Assembly plant in Michigan – the manufacturing location of the anticipated Chevrolet Bolt. This isn’t the first hurdle for the Bolt – more than 140,000 vehicles were recalled earlier this year following a series of fires thanks to faulty battery modules.
Investors seemed more concerned regarding the leaving of Cruise CEO Dan Amman. A reason was not given for the departure of Amman, who was a former GM President and CFO. Cruise, the highly-anticipated autonomous taxi service was supposed to start its commercial journey by the end of 2019, however, due to various headwinds and permit delays, the AV company is set to take off in San Francisco in the near future.
The potential upside for GM is by no means contentious. As the largest US automobile manufacturer who is also making movements in the EV and AV sector – the 11% sell-off could act as an entry point for GM at a reduced price. 2022 could be a big year for the company, it’s worth keeping an eye on.
