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Investor's Corner

General Motors emphasizing faster electric vehicle launches after positive 2021 earnings

Credit: Chevrolet

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General Motors (NYSE: GM) is gearing up for a major shift in 2022 thanks to its evolving electric vehicle program, planning for record profit levels that could surge the company into a more well-rounded placement in an increasingly competitive sector. The automaker is preparing for faster vehicle launches, according to CEO Mary Barra, who said more models would come to the market at a quicker pace. GM reported its Earnings for Q4 and its guidance for 2022 last night, sharing expansive details for the coming years, including new models, production plans and start dates, and more information regarding GM’s Cruise investment.

In general terms, General Motors reported a strong Q4 and Full Year 2021 in terms of financials. GM’s 2021 full-year earnings included a net income of $10.019 billion, a net income margin of 7.9 percent, and revenue of over $127 billion, a $4.5 billion increase from 2020. For Q4, GM had a weaker quarter than it did in the same period in 2020. The company reported $33.584 billion in revenue for Q4 ’21, which is nearly $4 billion less than Q4 ’20. Net income also decreased, but the full-year figures and profits undoubtedly outshine the losses for the quarter.

“For the full year, we generated $127 billion in revenue, $14.3 billion in EBIT-adjusted, 11.3% EBIT-adjusted margin, $7.07 in EPS diluted adjusted, and $2.6 billion in adjusted automotive free cash flow,” GM CFO Paul Jacobson said. “In the fourth quarter, we generated $34 billion in revenue, $2.8 billion in EBIT-adjusted, 8.5% EBIT-adjusted margin, $1.35 in EPS diluted adjusted, and $6.4 billion in adjusted automotive free cash flow. Free cash flow in the quarter was largely driven by working capital rewind as we were able to complete and wholesale over 80,000 vehicles that had previously been built without certain components, as well as dividends from GM Financial.”

GM’s Earnings Call was the highlight of the evening as it shed new light on the automaker’s planned expansion of its electric vehicle lineup. “We also recognize that we need to launch more EVs faster,” CEO Mary Barra said during the call. GM plans to launch deliveries of the Cadillac LYRIQ in “less than 60 days.” The LYRIQ will join the GMC Hummer EV, which recently started deliveries, as GM’s two newest electric vehicles for consumer use. In the commercial sector, GM said that production of the BrightDrop EV600 will begin late this year at the company’s CAMI Assembly Plant in Ontario, Canada. The automaker said that the site currently has a production capacity of 30,000 vehicles and should be doubled by mid-decade.

GMC Hummer EV sports its massive size alongside full-size SUV

GM said that the Silverado, Equinox, and Blazer EVs will all begin deliveries in 2023. The three vehicles will contribute to GM’s plan to deliver 400,000 EVs in North America in 2022 and 2023. These plans are supplemented by battery cell and assembly capacity investments in Michigan, which were recently announced. These new facilities “will give [GM] more than 1 million units of EV capacity in North America by the end of 2025, and this includes 600,000 full-size trucks,” Barra added.

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Interestingly, Barra held high regard for Cruise, a fully-autonomous ride-sharing company with investors such as GM, Honda, Softbank, Microsoft, and Walmart. Barra said that riding in a Cruise vehicle a couple of weeks ago was “the highlight of my career as an engineer and as the leader of General Motors.”

“It’s like having an experienced and attentive driver behind the wheel,” Barra said. “Now, as Cruise announced this morning, it is inviting members of the public to sign up for their own driverless rides through a waitlist on the Cruise website. This is the first truly driverless ride-hail service offered to members of the public in a dense urban environment. To maximize its learnings, Cruise will prioritize use cases that are a natural fit for autonomous ride-sharing.”

Barra believes that the first paid rides for Cruise could generate $50 billion by the end of the 2020s.

Semiconductor Forecast

“We saw improved semiconductor availability in the fourth quarter compared to the third quarter, which enabled us to increase our wholesale sequentially while substantially reducing our inventory of vehicles built without certain components,” Jacobson added. GM expects semiconductor availability to improve throughout 2022, reporting that the company has seen stabilization in the semiconductor environment. This leads GM to believe that it can reach a “normalized run rate toward the beginning of the third quarter [2022] with a target of around 800,000 units in North America on a quarterly basis.” This figure includes GM’s combustion engine vehicles.

Questions from Deutsche Bank analyst Emmanuel Rosner prompted Barra and other GM executives to give more information regarding their opinions of the semiconductor shortage and when it could begin to subside. Barra believes that, by the time Q3 and Q4 2022 roll around, “we’re going to be really starting to see the semiconductor constraints diminish.”

Analyst synopsis

GM’s Earnings Call was strong, giving investors more to be excited about in the way of its EV project and ability to avoid semiconductor issues. “We are big believers in the GM EV strategy as it’s all about converting 10%-15% of its customers to EVs by 2025 with 30 new EV models,” Wedbush analyst Dan Ives told us. “There are clear challenges, however, with massive resources dedicated towards EVs, we view this as the right move at the right time for Barra & Co.” In terms of keeping up with competitors, namely industry leader Tesla, Ives believes battery tech and GM’s exclusive Ultium platform is the roadmap to success for the Detroit company. “Ultium is the foundational piece of GM’s battery strategy and key to keep up in this EV arms race with Tesla leading the charge,” Ives added.

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Ives has a “Buy” rating on GM stock with an $85 price target. Ives is ranked 59 out of 7,776 analysts on TipRanks.

GM shares were down 3.43 percent at the time of writing, trading at $52.22 per share.

Disclosure: Joey Klender is not a GM Shareholder.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

Quotes provided by the Motley Fool.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Investor's Corner

Musk’s Tesla and SpaceX decline after Democratic Midterm sweep

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Credit: Grok

Tesla and SpaceX shares fell on Wednesday after Democrats swept both chambers of Congress. The decline stood out as broader market securities recovered and turned positive, while both of Musk’s publicly traded companies lagged.

CEO Elon Musk already joked about the unsuccessful campaigning for the Republicans, but now the new party will make pretty drastic changes to how it handles Tesla and SpaceX, and those companies will adjust their outlook.

Elon Musk hilariously comments on Midterm election results

Let’s take a deeper look.

Tesla ($TSLA)

Tesla shares traded lower during the regular session after Democrats secured both the House and Senate. The stock was down 2.32 percent at around 1:45 p.m. on the East Coast, trading at around $389.30.

The pressure is tied to more than the raw scale of Musk’s political spending, estimated at $450–474 million this cycle with roughly $224 million directed at Texas. In that state, Tesla now faces a Democratic governor and a Democratic senator after Gina Hinojosa unseated Greg Abbott and James Talarico defeated Ken Paxton.

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The Austin Gigafactory, Robotaxi pilot programs in multiple Texas cities, and any related AI compute expansion sit under a new state executive who campaigned against certain corporate subsidies and floated a moratorium on new data-center construction.

Federally, Democratic control of key committees opens the door to deeper examination of Tesla’s autonomous-driving safety record, federal energy-storage and manufacturing incentives, and the national-security implications of any combination with SpaceX.

Investors are also weighing whether the company’s historically close alignment with the prior Republican leadership will invite slower permitting, additional hearings, or tighter rules on Full Self-Driving deployment.

For Tesla, the political shift adds near-term friction around state permitting and federal regulatory approvals for autonomy and energy storage. A potential merger with SpaceX may face slower review even if it proceeds.

Core growth drivers such as vehicle deliveries, energy deployments, and robotaxi rollout remain intact, yet the stock now carries a higher political-risk premium that could weigh on valuation until the company demonstrates workable relationships with the new Texas leadership and congressional majorities.

SpaceX ($SPCX)

SpaceX shares also declined in live trading on November 4 following the Democratic midterm sweep. The stock traded at $134.97, down 4.49 percent. The drop occurred even as broader indexes stabilized, highlighting a company-specific reaction to the election outcome.

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Musk’s large contributions, concentrated in Texas races that both companies lost, place SpaceX’s Starbase launch facility and headquarters under a new Democratic governor.

At the federal level, Democratic control of Congress enables greater scrutiny of NASA, the Department of Defense, and other contracts that support a meaningful share of revenue, along with reviews of Starlink national-security uses and any Tesla merger. Analysts have noted that empowered committees can hold hearings and request documents on these relationships.

For SpaceX, the results raise the risk of delayed contract awards, higher compliance costs, and tighter constraints on AI and satellite infrastructure expansion, particularly in Texas where a data-center moratorium has been discussed.

A merger with Tesla could encounter political friction that slows integration of launch, connectivity, and autonomy capabilities.

While Starlink growth and launch cadence continue as primary drivers, the company faces a more contested path for federal funding and state-level operations, requiring management to rebuild ties with the new congressional majorities and Texas leadership to limit the overhang.

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Elon Musk calls Earth’s data centers “peanuts” next to what SpaceX is planning in orbit

Elon Musk says SpaceX capex efficiency is underestimated as orbital data centers loom by 2028.

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Elon Musk is pushing back on one of the biggest worries hanging over SpaceX stock. In a reply on X on Sunday, Musk said the company’s capital expenditure efficiency is severely underestimated. He was responding to a Milk Road Stocks post citing analyst Kyle Reidhead, who estimates SpaceX will need to spend roughly $470 billion over the next five quarters.

Reidhead built that figure around the target SpaceX set on its third quarter earnings call: 13 gigawatts or more of compute by the end of 2027. In his breakdown, Nvidia captures 83 to 89 percent of the spending. SpaceX ended the quarter with 1.7 GW of nameplate compute and guided to $35 billion to $40 billion in fourth quarter capex, as Teslarati reported.

Musk did not attach a number to his claim, but the earnings call shows the argument. CFO Bret Johnsen said new compute currently pays for itself in under a year at today’s pricing, and Musk said that window could shrink to six months next year. Using that pace, Reidhead argues about $230 billion of the $470 billion could come from operating cash flow and about $60 billion from SpaceX’s roughly $90 billion cash pile, leaving around $180 billion to borrow. Musk confirmed last week that SpaceX had already closed a new $40 billion debt raise to buy GPUs.

The ground buildout is not the end goal. It is what is meant to pay for the move to orbit. Replying on Friday to charts built from Sequoia partner Shaun Maguire’s SpaceX model, Musk wrote that “Terrestrial compute will be peanuts compared to orbital compute,” adding that orbital compute deployed per month “probably exceeds terrestrial around the end of 2028 and then far exceeds it in 2029.”

Maguire’s model shows how steep that path is. It has capex climbing from $88 billion this year to $290 billion in 2027 and $369 billion in 2028, with SpaceX burning $77.8 billion in cash this year and $122.6 billion next year before turning $114.9 billion cash positive in 2028. Musk’s response to the model was, “I think we can do better.”

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The orbital half runs through Starmind. SpaceX plans to operate up to 1 million AI satellites flying in clusters of about 10, linked by roughly 10 terabits of bandwidth, with deployment of thousands of units starting as soon as late 2027 out of its Gigasat factory in Bastrop, Texas, according to SpaceX’s space safety page. Musk has said each Starmind spacecraft will carry more than 250 kW of solar power.

Getting there depends on launch volume. Maguire’s model assumes 250 Starship flights in 2028, up from two this year and 38 next year. The nearer test is financial: SpaceX guided to $33 billion to $37 billion in first quarter 2027 revenue, more than double the $14.58 billion it booked in Q3, and Musk reposted that guidance again on Sunday morning.

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SpaceX President to gift Trump Accounts her SpaceX stock

Gwynne Shotwell’s 2 million SpaceX shares are headed to children’s Trump Accounts starting this December.

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Concept rendering of SpaceX President Gwynne Shotwell overlooks the company’s Hawthorne, California headquarters as an American flag flies over the campus at sunset.

SpaceX President Gwynne Shotwell said Friday that more than 2 million SpaceX shares belonging to her and her husband, Robert, will be distributed to children’s Trump Accounts in December, turning a pledge she made over the summer into an actual transfer. “Robert and I are thrilled that our gift of over 2 million shares of SpaceX stock will be distributed to children’s Trump accounts in December!” Shotwell wrote on X, adding that the shares are “transferring to escrow as we speak.”

The first round goes to children aged 11 to 17 who live in ZIP codes where the median family income is $57,000 or less, along with kids in ZIP codes with too few residents for the Census to report that figure. Shotwell said those families should receive a notice by Monday, Reuters reported.

A second gift is expected to be finalized in the next few weeks. That round will cover eligible children in military families serving overseas, children in foster care, and more kids in Texas counties near the Shotwells’ home where median family income is $90,000 or less. Elon Musk replied to the announcement with “Cool” and a heart emoji.

Shotwell first announced the donation on July 6, less than a month after SpaceX priced its record IPO at $135 per share on the Nasdaq. IPO filings showed Shotwell owned about 12.6 million SpaceX shares, Quartz reported at the time, which makes the gift roughly one sixth of her stake. At the roughly $146 per share used to value Musk’s own pledge earlier this month, 2 million shares are worth about $290 million.

How the stock would actually reach the accounts had been an open question since July. Treasury guidance acknowledged that stock donations could flow into Trump Accounts, but it did not explain the mechanics for a program whose contributions default into an S&P 500 index fund. Shotwell thanked the Treasury, the IRS, the Dell Foundation, Greater Horizons, Invest America and the law firms Morgan Lewis and Gibson Dunn for “working over the past few months to make this happen.”

The transfer also works as a dry run for a far larger gift. On October 19, Musk said he would give one of his SpaceX shares to every kid in America next year and called it “the first of many.” With roughly 72 million children in the country, that pledge is worth about $10.5 billion. President Donald Trump thanked Musk the same day and said the shares would go through Trump Accounts, though neither SpaceX nor the Treasury has published how or when that distribution will happen.

Shotwell’s recipients also fill a gap in the program itself. Trump Accounts launched on July 4, and the $1,000 Treasury deposit only goes to babies born between 2025 and 2028. Teenagers aged 11 to 17 receive no government seed money, so for many of the families getting a notice on Monday, SpaceX stock will be the first asset in the account. The accounts convert into retirement accounts when the child turns 18.

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