General Motors' (GM) stock traded higher Wednesday, after the automaker announced a new $10 billion share repurchase program. Wedbush Managing Director Dan Ives calls the buyback "important" after recent headwinds like Cruise autonomy setbacks and UAW labor unrest weighed on the company's success. Ives views this decision as GM working to "put the train back on the tracks" and regain control.
However, Ives notes demand remains hard to gauge for GM's EV portfolio, but that the company has the vehicles and distribution to be successful.
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JOSH LIPTON: So Dan, let me first just get your take on this news here, we've got revised guidance, big shareholder repurchase update, stock is ripping higher. What did you make of the news?
DAN IVES: I mean, look, they've been through an F5 tornado. I mean, if you look at Barra in GM, and this finally, it's ripping the band-aid off. I mean, it's given some guidance. The buyback, I think, is important. And then, when it comes to Cruise and some even from the electric vehicle perspective, maybe pulling back some of those goals. Look, the reality is UAW, that's sort of an albatross, that's done. This is almost where I'd put-- putting the train back on the tracks.
JULIE HYMAN: Well, Dan, hey, It's Julie, by the way. Putting the train back on the tracks, but you can't make customers want to buy the cars at the end of the day, particularly the EVs. Or can you? Is the issue that people don't want them? Or is the issue that GM is not making the right EVs?
DAN IVES: Well, Julie, the issue is really, 2024 was going to be the year. I mean, that was the inflection point year that Mary and the team talked about for years. Now, obviously, UAW got in the middle of that. It's still TBD. I mean, you got to really see a year from now what the demand looks like. I believe--
I mean, I've been to Detroit many times. I've seen what they're coming out with. I believe the next 12 to 18 months, they have the vehicles, they have the distribution. It's now about conversion. That's really going to be the key for GM looking ahead, especially ironically, you got Cybertruck tomorrow, where it just shows Tesla, they're just doubling down when it comes to EVs.
JOSH LIPTON: But you know what's interesting, Dan? I just want your broader take on the EV market. I look at that market right now. And it looks like consumer demand is wavering, Dan. I mean, I see companies that are cutting prices, companies putting off billions in EV-related investments. I mean, are you still confident, not just for GM, but when you look at the EV market, are you so confident that it's going to grow the way we would expect. That it's still a smart opportunity for investors?
DAN IVES: Yeah, look, John, I think if you look like China, OK, could that be the blueprint, Europe, US? Maybe it's more modest, right, in terms of what the growth rate looks like. But even if you look at 3%, let's say it doesn't go to 40% penetration. Let's say it goes to 20% in the next six, seven years. That's a few trillion of ultimately, when you look at the actual opportunity.
That's significant, that's what the automakers are going after, that's what Tesla is going after, Rivian, and, of course, the 313 area code. So we continue to be very bullish on electric vehicles in terms of what's happening globally. I think it's just the start.
JULIE HYMAN: Dan, you know we want to ask you about the Cybertruck, but I got one more question on GM. And we just showed on the screen, you still have an outperform on the stock, but you don't sound like you have a lot of conviction in your voice when we talk to you about it, even if you've got that outperform.
DAN IVES: Look, my view is GM is a stock where there's no reason from a valuation and they're successful. It goes back to what I've used the mid 40s. So from a valuation, just given the opportunity, but being a GM bull it's like being a Giants fan, right? It's been a very difficult path the last year.