What Updates Could We See during GM’s 1Q16 Earnings Release?



GM’s 1Q16 earnings

So far in this series, we have covered analysts’ estimates for General Motors’ (GM) upcoming earnings release. In the last couple of quarters, GM has been exploring new areas of business and working to align with changing auto industry dynamics and demand patterns. During GM’s 1Q16 earnings release, we can expect some updates in these areas. In this article, we’ll find out what key updates General Motors might provide that could be crucial in the long run.

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Updates on electric vehicle segment

Currently, GM has a total of five vehicles with some form of electrification in its US product portfolio. This includes the second-generation Chevrolet Volt that the company introduced in 2015.

In addition, General Motors plans to launch its all-electric model, the Chevrolet Bolt, in 2017. The car, which is priced at $37,500 before federal incentives, will have more than a 200-mile range per charge. The Chevrolet Bolt will be a mass-targeted EV (electric vehicle). The production of the vehicle is expected to begin in late 2016 at the company’s Orion assembly plant. We might see updates on this ambitious project during GM’s 1Q16 earnings release.

An update on General Motors’ electric vehicle development is crucial, especially after Tesla (TSLA) recently unveiled its first mass-targeted EV, called “Model 3.” Notably, Tesla’s Model 3 unveiling event has received mostly positive responses from investors and auto enthusiasts. Note that Chevrolet Bolt is expected to face direct competition from Tesla’s Model 3 with nearly similar pricing and driving range. Therefore, it will be interesting to see what General Motors can propose to take on the competition.

Among other mainstream automakers (XLY), Ford (F) and Honda (HMC) also have revealed their plans to increase their investment in the EV segment.

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Updates on car-sharing and on-demand mobility business

After realizing the potential of rapid growth in car-sharing and on-demand mobility business, GM recently became one of a few automakers to get involved in this area. This all began with General Motors’ half billion dollar investment in US-based car-sharing services provider Lyft.

In March 2016, General Motors and Lyft launched a program called Express Drive. In this program, General Motors will provide flexible and affordable weekly rental options to Lyft drivers. Express Drive will enable Lyft drivers to rent a car from GM with a starting cost of $99 per week including insurance and maintenance.

Meanwhile, General Motors also plans to develop an on-demand autonomous (or driverless) vehicle network with Lyft. This network should also help GM with Maven, its personal mobility car-sharing service launched in January 2016. Maven provides residential and peer-to-peer car-sharing services. Therefore, investors can also expect updates on this front during GM’s 1Q16 earnings release.

Continue to the next article to find out where General Motors’ valuation multiples are trading ahead of its 1Q16 earnings release.


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