It is bad news for legacy automaker General Motors (GM) drivers today, or at least a comparative handful of them. Specifically, the handful who actually bought an electric SUV. Indeed, there is a new recall effort that was enough to make GM stock skid, as it was down fractionally in Tuesday afternoon’s trading.
The recall effort covers 21,469 electric SUVs that may have “an unexpected activation of the anti-lock braking system.” The only people who need to be concerned, at last report, are those who bought a 2023 or 2024 Cadillac Lyriq all-wheel-drive model, and apparently, repairs will be simple. An over-the-air software update is apparently all that is required to get this car back on its feet, metaphorically.
Reports noted that the National Highway Traffic Safety Administration (NHTSA) had already had an investigation running into Cadillac Lyriq vehicles going back to April. There were reports at the time of “…a loss of brake assist,” though how closely the two incidents are connected is somewhat unclear. In fact, only 3,000 Cadillac Lyriqs were under investigation at the time, a number which has since ballooned to over seven times that.
Chinese Job Cuts Ahead
Meanwhile, in China—where some reports from as recently as May suggest that the economy is in trouble—GM is pulling back on its overall presence. Not only has GM been laying off Chinese staff, but it is also looking into a complete “structural overhaul” of the business.
GM’s sales in China were pretty impressive at one point; 2017 saw peak sales in China. But there are serious doubts that the Chinese market will ever recover to that point again. Thus, for now, GM is cutting staff in market-facing operations, including research and development.
Is GM a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GM stock based on 11 Buys, two Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 27.13% rally in its share price over the past year, the average GM price target of $57.50 per share implies 34.28% upside potential.
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