Douglas A. McIntyre
4 min read
Quick Read
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GM stock is down 1% this year against the S&P 500’s 13% gain, its $69 billion market cap tiny beside Tesla’s $1.5 trillion.
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Tariffs on Chinese EVs protect GM’s US market position more than its own products, and politicians can remove that shield at any time.
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Changing where its stock trades won’t help GM (NYSE: GM), given its troubled market share in the US and nowhere to go in China and the EU, the world’s other large car markets. One theory is that joining the Nasdaq-100 will boost demand for GM’s shares. That doesn’t change any of GM’s problems. Another theory is that the move will position America’s largest car company as a tech company. That won’t work either.
As with almost all companies publicly traded for years, the stock price tells the story. So far this year, GM’s stock is down 1% while the S&P 500 is up 13%. Over the last five years, GM’s stock is up 48% while the S&P 500 is up 68%. For context: GM’s market cap is $69 billion. Tesla’s market cap is $1.5 trillion. No matter what Elon Musk says, Tesla (NASDAQ: TSLA) is still another car company.
GM’s statement about the move did not make much sense. Its CFO said, “GM’s customer-focused, technology-driven strategy is creating value for our stockholders, making Nasdaq a natural home for our listing as we grow.” All that means is that GM is trying to do what every other large manufacturer in the world is doing. It simply means that it wants its cars to operate more like PCs and smartphones than traditional cars.
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The European Automobile Manufacturers’ Association (ACEA) data shows that GM has failed to get a foothold in the EU and UK. VW, Stellantis (NYSE: STLA), and Renault still dominate those markets. The fastest-growing car companies in the region are Chinese EV giant BYD and Tesla.
