Article said that Honda Motor and General Motors (GM) have opted to cancel their collaborative efforts in developing affordable electric vehicles (EVs), a decision that comes just a year after they initially joined forces to take on Tesla in the EV market. This move highlights GM's shift towards slowing down the launch of several EV models to focus on profitability, given the increasing costs associated with United Auto Workers strikes. Although both companies have decided to halt this particular development, they maintain their commitment to providing affordable EVs to the market. For Honda, the plan to exclusively sell electrified vehicles by 2040 remains unchanged. Despite the explanation, I still don’t quite understand, why this decision came, when the sole purpose was to beat Tesla in the race.
Article continued with news that after a year of careful consideration, Honda and General Motors have determined that their joint development of an affordable electric vehicle would be challenging from a business perspective, leading to the conclusion to end this specific project, according to Honda's CEO Toshihiro Mibe. Honda clarified that a separate partnership with GM and its Cruise unit would not be impacted by a recent safety incident related to Cruise's driverless testing permit in California, which was suspended. Despite this, Honda is moving forward with its goal of establishing a joint venture with GM and Cruise in the first half of 2024 to launch a driverless ride service in Japan by early 2026. So not all bad news in the end, as they will still cooperate in some parts of business.
I believe that news like this will negatively affect their stocks. Checking the chart, General Motors stocks have had a quite bumpy five years. They were constantly fluctuating. For example, the lowest their stocks have been was 20,99 USD per stock, and the highest 59,10 USD.* However, for the majority of this time period, stocks have been moving rather sideways.*
Despite not so promising news and not so attractive chart, I have decided to keep an eye on them, as I believe that they will come with other innovations and good news for us investors.
Movement of General Motors stocks in the last five years. (Source: Investing) *
* Past performance is no guarantee of future results.