GM stock value has largely taken a downward turn in recent weeks, which is partially due to the overall drop in stocks in response to the Russia-Ukraine war that continues to rage. The rise of oil prices is considered to be the main reason for the overall stock drop due to increased fears of inflation. Slightly higher interest rates are also a factor in the stock drop for automakers.
Factors in the GM Stock Drop
The war on the other side of the ocean is not the only reason for the GM stock drop, however. GM has been searching for a new reliable nickel source as prices are continuing to rise in that area. GM also recently confirmed a deal with China concerning imported vehicles. A recent legal payout from GM Financial might also be affecting the GM stock drop. Some macro factors may be involved in the stock drop for GM. In recent months,
GM has announced a strong commitment to the mass adoption of a fully electric lineup. The company announced a $7 billion investment in its production facilities aimed at making more electric vehicles. GM now has the goal of producing over one million units of electric vehicles. It’s possible that the amount of money being spent by GM concerning electric vehicles has affected its stock.
Future Developments
Despite the drop in GM stock so far this year, GM stock gained quite a bit throughout 2021. It’s likely that the drop this year so far has to do with the war, inflation, and the price of oil. Like many other automakers, there has also been difficulty in meeting demand with supply.
Chevrolet dealers and GM dealers have had some problems keeping a decent amount of new inventory on their lots. Some automakers, like Ford, have announced interest in moving toward a mostly online business model where pre-orders run the show.
Toyota and Tesla Move Up
Meanwhile, Toyota and Tesla have seen gains compared to other automakers. Tesla is obviously firmly entrenched in the fully EV market, but Toyota has struggled somewhat to return its output to pre-pandemic levels. Growing supply chain problems prompted Toyota to cut output from April to June by 17%. The goal is to find a more reasonable output pace that won’t be as affected by the supply chain problems.
However, Toyota recently experienced another setback with halted production after a large earthquake in Japan. Toyota expects to lose an output of roughly 20,000 vehicles due to the shutdowns. When it comes to vehicles shipped to the American market, the shutdown will mainly affect the RAV4, Land Cruiser, and Yaris.
Most automakers are facing some uncertain times lately as they move to change the way they do business on nearly every level due to the Ukraine-Russia conflict and other factors. Because of this, you might have a hard time finding exactly what you want at your Chevrolet dealer. This is why many consumers are leaning toward pre-ordering their new vehicles instead of expecting to find them on the lot.
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