U.S. auto biggie General Motors GM is temporarily pausing the production of its BrightDrop electric delivery vans as demand seems to be cooling down. The company is halting operations at its CAMI Assembly plant in Ontario, temporarily laying off 1,200 workers. The production freeze begins today and is expected to last until October 2025. GM claims that this suspension of operations is unrelated to recent auto tariffs. Instead, the decision was made to rebalance inventory and align production with slower-than-expected demand.
During the downtime, GM plans to retool the plant for 2026 model-year BrightDrop vans. When production resumes, it will be limited to a single shift, resulting in 500 permanent job cuts. Despite the pause, GM has reiterated its long-term commitment to BrightDrop and the CAMI facility.
Nonetheless, the move signals ongoing challenges in the commercial electric vehicle (EV) segment, where adoption has been slower than anticipated. As GM moves ahead with its decision, should you reassess your position in the stock?
GM stock has been down 18% year to date, underperforming its closest rival, Ford F, which has declined by a more modest 6%. With shares under pressure, investors may be wondering if General Motors’ dip is a buying opportunity now or if there are major headwinds ahead. Let’s take a closer look.
YTD Price Performance
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GM’s U.S. Market Leadership
General Motors is the top-selling automaker in the United States. Its full-year market share in the United States rose 30 basis points to 16.5% in 2024. The company sold 693,363 units in the first quarter of 2025, up 17% year over year. It posted double-digit gains across its key brands— Chevrolet, Buick, GMC and Cadillac.
That said, the deliveries for most automakers in the first three months of 2025 were rather strong, likely fueled by consumers rushing to secure new vehicles ahead of tariff-driven price hikes.
Japan’s auto giant Toyota TM was the second-highest seller in the country. Toyota sold 570,269 vehicles in the first quarter of 2025, with electrified vehicles (including hybrids, plug-in hybrid EVs and fully EVs) accounting for 50.6% of the total. While the Toyota division reported sales of 487,226 units, the Lexus division hit a record 83,043 deliveries.
Ford was an outlier, witnessing a 1.3% sales decline in volumes, totaling 501,291 units, largely due to reduced rental fleet sales and the discontinuation of models like the Ford Edge and Transit Connect. Nonetheless, Ford was still the #3 seller in the United States.
General Motors’ Strengthening EV Portfolio
General Motors is making significant strides in its electrification efforts. After producing 189,000 EVs last year, the company aims to ramp up production to 300,000 units in 2025. EV sales surged 94% to 31,887 units in the first quarter of 2025, positioning GM as the #2 EV seller in the United States. In the final quarter of 2024, GM's EV portfolio reached "variable profit positive" status, driven by scale efficiencies, reduced material costs and new additions like the Cadillac Escalade IQ and Sierra EV. The company anticipates a $2 billion reduction in EV operating losses this year.
Other Factors That Bode Well for GM
General Motors is seeing positive results from its restructuring efforts in China, with a return to profitability expected in 2025. Encouragingly, GM achieved its $2 billion fixed-cost reduction target in 2024. By exiting robotaxi development, it is set to save another $1 billion annually. GM expects adjusted EPS of $11-$12 in 2025, up from $10.60 in 2024.
Financially, General Motors is strong, with $35.5 billion in liquidity, including $21.7 billion in cash. In February 2025, it announced a dividend hike of 25%, which will take effect with GM’s next planned payout, to be declared this month. Additionally, General Motors has been aggressively buying back shares. It met its goal of reducing its outstanding share count below 1 billion, closing 2024 at 995 million shares. GM also announced a $6 billion buyback program a couple of months back. The plan includes a $2 billion accelerated repurchase, which is set to be completed by the second quarter of 2025, leaving $4.3 billion for future buybacks.
How Prepared is General Motors for Tariffs?
While Trump paused reciprocal tariffs for 90 days, automotive tariffs were not included. An additional 25% tariff on auto parts is expected next month. Despite producing over half of its U.S. vehicles domestically, GM faces risk due to reliance on foreign parts. However, GM is working with logistics partners to optimize supply chains. It has cost-effective strategies that will help it adapt, ensuring solid long-term prospects despite near-term challenges.
How Should You Play GM Stock Now?
At its current levels, GM stock looks highly attractive from a valuation standpoint. With a forward price-to-earnings ratio of 3.76, GM trades at a significant discount to industry levels as well as its own 5-year average.
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The Zacks Consensus Estimate for GM’s 2025 EPS has moved up 18 cents over the past 30 days and implies a 9% year-over-year uptick.
The Wall Street average target price of $58.10 for GM stock suggests an upside of more than 33% from current levels.
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Overall, GM is well-positioned with a strong U.S. presence, growing EV business, a focus on cost-cutting, and investor-friendly initiatives. Also, given its attractive valuation stock relative to its potential, GM is worth buying at the moment.
The stock carries a Zacks Rank #2 (Buy) and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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