General Motors $GM ( ▼ 0.2% ) is a company caught between two worlds: the profitable present of North American trucks and SUVs, and the uncertain future of electric vehicles and global competition. While GM generated $187.4 billion in revenue in 2024 with strong North American performance, the company faces serious headwinds including a $4.4 billion loss in China, massive EV transition costs, and a DCF valuation suggesting negative intrinsic value. GM is essentially performing open-heart surgery on itself while running a marathon – transforming from a traditional automaker into a technology-forward mobility company while trying to maintain profitability. This is a high-stakes bet on management's ability to execute one of the most complex business transformations in corporate history, making it suitable only for investors comfortable with significant execution risk.

The Uniswap web app lets you seamlessly trade tokens across 14+ chains with transparent pricing.

Built on audited smart contracts and protected by real-time token warnings, Uniswap helps you avoid scams and stay in control of your assets.

Whether you're discovering new tokens, bridging between chains, or monitoring your portfolio, do it all in one place — fast, secure, and onchain.

Get Started

Think of General Motors as the automotive equivalent of a diversified conglomerate that's trying to reinvent itself while keeping the lights on. At its core, GM designs, builds, and sells trucks, crossovers, cars, and automobile parts worldwide – but calling it just a "car company" in 2024 is like calling Amazon just a "bookstore."

GM operates through four main business segments, each with its own personality and purpose:

GM North America (GMNA) - The Golden Goose 🥇 This is where the magic happens, generating $157.5 billion in revenue ↗️ in 2024. GMNA focuses on what Americans love most: big trucks and SUVs. Think Chevrolet Silverado, GMC Sierra, and Cadillac Escalade. These aren't just vehicles; they're profit machines with variable profits running about 160% of the portfolio average. When your neighbor buys a $70,000 pickup truck, GM is doing a happy dance.

GM International (GMI) - The Complicated Relationship 🌍 With $13.9 billion in revenue ↘️, GMI is like that friend who seemed promising but keeps disappointing you. The segment includes operations worldwide, but China is the elephant in the room. GM's Chinese joint ventures lost a staggering $4.4 billion ↘️ in 2024, including $2.1 billion in impairment charges. It's like watching your investment in a promising startup slowly burn through cash while local competitors eat your lunch.

Cruise - The Expensive Science Project 🤖 GM's autonomous vehicle subsidiary that's been burning cash faster than a Formula 1 car burns fuel. After years of promises about robotaxis, GM pulled the plug on funding Cruise's robotaxi dreams in December 2024, pivoting to focus on personal autonomous vehicles instead. Sometimes the future takes longer to arrive than expected.

GM Financial - The Steady Eddie 💳 The financing arm that generated $15.9 billion in revenue ↗️. This isn't just about loans; it's about controlling the entire customer experience. When you finance your GM vehicle through GM Financial, the company makes money on both the car sale AND the financing. It's like owning both the restaurant and the credit card company that customers use to pay for dinner.

GM's revenue model is beautifully simple in concept but complex in execution:

GM obsesses over several metrics that tell the real story:

GM finds itself in the automotive equivalent of a three-way chess match: competing with traditional rivals, fending off Tesla's electric revolution, and watching Chinese automakers scale at unprecedented rates with cost advantages that seem almost unfair.

Traditional Rivals: Ford and Stellantis (formerly Chrysler) remain GM's primary sparring partners in North America. The truck wars between GM's Silverado, Ford's F-150, and Ram's pickup trucks are legendary, with each company spending billions to gain even small advantages. GM's slight market share gain to 16.5% ↗️ in 2024 suggests they're holding their own.

The Tesla Factor: Tesla didn't just build electric cars; they redefined what consumers expect from vehicles. While GM is working on their EV transition, Tesla's first-mover advantage and cult-like following create a formidable challenge. GM's response has been methodical rather than revolutionary – sometimes that works, sometimes it doesn't.

The Chinese Dragon: This is where things get scary for GM. Chinese automakers like BYD are scaling EV production with cost structures that make traditional automakers look like they're operating in slow motion. In China, GM's market share dropped to 6.9% ↘️, down 1.5 percentage points, as local competitors offer similar features at prices that foreign automakers simply can't match.

Wins:

Challenges:

Let's dive into the financial engine that powers this automotive giant, because understanding where GM makes (and loses) money is crucial for any potential investor.

Total Revenue: $187.4 billion ↗️ (up 9.1% from 2023)

By Segment:

North America: This is where GM prints money. The region loves big trucks and SUVs, and GM delivers exactly what customers want. The $157.5 billion in GMNA revenue isn't just impressive – it's essential, because it funds everything else the company does.

China: Once the crown jewel, now the cautionary tale. GM's Chinese joint ventures went from generating $446 million in equity income in 2023 to losing $4.4 billion ↘️ in 2024. That's not a typo – it's a complete reversal of fortune that highlights how quickly automotive markets can shift.

Rest of World: The remaining international operations are smaller but generally more stable than China, though they face their own challenges with currency fluctuations and local competition.

Alright, let's talk about what GM might actually be worth – and buckle up, because this DCF analysis delivers some eye-opening results that'll make you question everything you thought you knew about automotive valuations.

Before you spit out your coffee, let's unpack what this unusual valuation is telling us.

The DCF model is projecting consistently negative free cash flows across the five-year forecast period:

These projections suggest GM is expected to burn through cash rather than generate it, which is... concerning, to put it mildly. The model uses a discount rate (WACC) of 6.31% and assumes a modest 2.5% terminal growth rate – both reasonable assumptions that make the negative valuation even more striking.

The negative cash flow projections likely reflect several factors:

Here's the thing about DCF models – they're only as good as their assumptions, and this one seems to be painting an extremely pessimistic picture. The current market cap of $55.4 billion and P/E ratio of 9.89 suggest investors aren't quite as bearish as this model implies.

Upside Scenarios:

Downside Risks (as if we needed more):

This DCF analysis essentially argues that GM's current business model is unsustainable at current spending levels. However, the company generated $20.1 billion in operating cash flow in 2024, which suggests the underlying business isn't as dire as the projections indicate.

The disconnect might be that the model is capturing the transition costs without fully accounting for the potential benefits of GM's strategic investments. It's like valuing a caterpillar without considering it might become a butterfly – though in this case, we're not sure if GM will emerge as a beautiful butterfly or just a very expensive caterpillar.

Bottom Line: This valuation serves as a serious warning flag, but investors should dig deeper into the assumptions and consider whether the market is pricing in a more optimistic scenario than the DCF suggests.

Investing in GM today requires some serious mental gymnastics. You're essentially betting on one of the most complex corporate transformations in business history, while the company navigates a perfect storm of technological disruption, geopolitical tensions, and changing consumer preferences. Let's break down what you'd need to believe for each scenario.

The Bull Case Math: If GM executes this transformation successfully, you're looking at a company that could dominate the North American EV market while maintaining its ICE profitability during the transition. The current P/E ratio of 9.89 suggests the market isn't pricing in much success – so if they pull it off, the upside could be substantial.

The Bear Case Reality: That DCF valuation of -$87.93 might not be as crazy as it looks. If GM can't successfully navigate this transition, you're looking at a company that could face serious financial distress despite its current cash position.

GM is essentially a massive corporate science experiment happening in real-time. They're trying to transform from a traditional automaker into a technology-forward mobility company while maintaining profitability from their legacy business. It's like performing open-heart surgery on yourself while running a marathon.

The Good: GM has several genuine advantages – strong North American market position, substantial cash generation from profitable segments, and a management team that seems to understand the challenges they face.

The Bad: The Chinese market collapse shows how quickly automotive fortunes can change. The massive capital requirements for the EV transition create execution risk, and the competitive landscape is more intense than ever.

The Ugly: That DCF analysis suggesting negative intrinsic value isn't something you can just ignore. Even if the assumptions are overly pessimistic, it highlights the enormous challenges GM faces.

Investing in GM today is not for the faint of heart. You're betting on management's ability to execute one of the most complex business transformations in corporate history, while competing against some of the most aggressive and well-funded competitors the automotive industry has ever seen.

If you believe in GM's transformation story and think the market is overly pessimistic about their prospects, the current valuation might represent an opportunity. But if you're looking for a safe, steady investment, you might want to look elsewhere – because GM's future is anything but certain.

The company's vision of "zero crashes, zero emissions, and zero congestion" is admirable, but getting there while maintaining profitability and shareholder returns? That's the $55 billion question that every GM investor needs to answer for themselves.

AI-written, human-approved

Disclaimer: This guide is for informational purposes only and does not constitute financial advice, investment recommendations, or an offer or solicitation to buy or sell any securities. The information contained in this report has been obtained from sources believed to be reliable, but StrataFinance does not guarantee its accuracy, completeness, or timeliness.