Q4 Earnings Highlights: General Motors (NYSE:GM) Vs The Rest Of The Automobile Manufacturing Stocks

As the fourth-quarter 2024 earnings season for the auto sector unfolds, investors are keenly watching General Motors (GM) and other automobile manufacturing stocks to identify the most promising investment opportunities. GM reported its Q4 earnings on February 28, 2025, beating analysts' expectations and showcasing the company's resilience in the face of industry challenges. This article will delve into GM's Q4 earnings performance, compare it to other automobile manufacturing stocks, and analyze the primary factors contributing to GM's relative performance.

GM's Q4 Earnings Performance

GM reported a 9% year-over-year revenue increase to $187 billion, driven by robust demand for large SUVs and pickup trucks, as well as the execution of the company's core business strategy. The company's total U.S. vehicle sales increased to 2.7 million units, resulting in a market share of 16.5%, indicating a strengthening market position despite challenges in EV adoption. GM's automotive operating cash flow increased by $3.1 billion, partially offset by a significant decrease in net automotive cash from investing activities, highlighting the substantial capital expenditures required for the EV transition and expansion of manufacturing capacity.



GM's strong revenue growth, cost discipline, and the strength of the existing product portfolio contributed to its impressive Q4 earnings performance. However, the company faces challenges in the Chinese market and the slower-than-anticipated consumer adoption of EVs. GM's market share in China decreased by 1.5 percentage points to 6.9%, indicating a weakening market position despite the overall growth in the Chinese automotive market. The company incurred a $2.4 billion other-than-temporary impairment charge on equity interests in certain China JVs, highlighting the risks of operating in the Chinese automotive market.

Comparing GM to Other Automobile Manufacturing Stocks

In comparison to other automobile manufacturing stocks, GM's Q4 earnings performance was notable for its strong revenue growth, increased market share, and commitment to the EV transition. However, GM's dependence on high-margin ICE vehicles for near-term profitability creates vulnerability to shifts in consumer preferences and stricter fuel economy regulations. Maintaining profitability in this segment is critical to funding the EV transition.

Ford, for instance, has been more focused on improving quality and cost in its Model e electric vehicle business, which lost another $5.1 billion last year. The company expects EV losses to reach around $5 billion for the year. Ford's EV strategy has been more focused on improving quality and cost, with the company expecting to make significantly more progress in these areas in 2025.

Primary Factors Contributing to GM's Relative Performance

Several factors contribute to GM's strong performance relative to other automobile manufacturing stocks in the Q4 earnings season:

1. Strong Revenue Growth: GM's 9% year-over-year revenue increase to $187 billion, driven by robust demand for large SUVs and pickup trucks, outpaced the industry and was fueled by the execution of the company's core business strategy.
2. Increased Market Share: GM's total U.S. vehicle sales increased to 2.7 million units, resulting in a market share of 16.5%. This represents an increase of 0.3 percentage points compared to the previous year, indicating a strengthening market position despite challenges in EV adoption.
3. Commitment to EV Transition: GM's significant investments in EV manufacturing facilities, such as Factory ZERO and the conversion of Orion Assembly, along with partnerships to expand the EV charging network, signal the company's commitment to its electric vehicle strategy. This is crucial for enhancing consumer acceptance and mitigating transition costs.
4. Strong EBIT-Adjusted Margins: GM expects strong EBIT-adjusted margins in 2025, driven by the strength of the existing product portfolio, improving EV margins, and cost discipline. This will help mitigate the transition costs of shifting to EVs.
5. Resilience of Financial Services: GM Financial's revenue increased by 12% year-over-year to $15.8 billion, indicating the success of its business model and overall resilience of the financial services industry despite ongoing economic uncertainty.

In conclusion, GM's Q4 earnings performance highlights the company's resilience and strong relative performance compared to other automobile manufacturing stocks. Despite challenges in the Chinese market and slower-than-anticipated consumer adoption of EVs, GM's commitment to the EV transition, strong revenue growth, and increased market share position the company well for future success. Investors should closely monitor GM's progress and consider its stock as a potential investment opportunity in the automobile manufacturing sector.