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General Motors (GM) is scheduled to report quarterly results before market open on Tuesday, July 23, with a conference call scheduled for 8:30 am EST, while Ford (F) is scheduled to report after market close on Wednesday, July 24, with a conference call scheduled for 5:00 pm EST. What to watch for:

GM SALES: In July, GM announced the company and its dealers delivered 696,086 vehicles in the U.S., up 0.6% year-over-year, in Q2 and 1,290,319 vehicles in the U.S., down 0.4% year-over-year, in 1H24. "We have an incredible portfolio of diverse vehicles and we're flexible, so we can win as more customers embrace EVs and we can keep winning if they want to stay with the engine technologies they know," said Marissa West, GM senior vice president and president, North America. Additionally in July, GM announced the company and its joint ventures delivered nearly 373,000 vehicles in China in Q2.

GM GUIDANCE: Along with its Q1 results, the company raised its FY24 adjusted EPS view to $9.00-$10.00 from $8.50-$9.50. Consensus, which stood at $9.08 at the time, has since risen to $9.72. The company also raised its FY24 adjusted EBITDA view to $12.5B-$14.5B from $12B-$14B and sees FY24 capital spending $10.5B-$11.5B. Additionally in June, GM CFO Paul Jacobson said that the company now expects 2024 electric vehicle sales of 200,000 to 250,000, down from the company's previously announced range of 200,000 to 300,000 units.

GM PARTNERSHIPS, INITIATIVES: In April, GM announced it would relocate its global headquarters to Hudson's Detroit in 2025. The company stated, "This marks GM's fourth headquarters location in the city since 1911, reaffirming its longstanding commitment to Detroit." Additionally in April, GM Energy announced initial offerings for residential customers that will enable the use of vehicle-to-home bidirectional charging technology to provide power from a compatible GM EV to a properly equipped home. The company also announced in April the discontinuation of Smart Driver based on customer feedback. In May, GM Defense and Mistral partnered for an integration in the company's light tactical utility vehicle. In June, the company promoted Baris Cetinok and Dave Richardson to head its software and services organization as the company advances in electric, autonomous and connected vehicles. Additionally in June, GM's board of directors approved a new $6B share repurchase plan. GM Financial, also announced in June the withdrawal of GM Financial Bank's Interagency Charter and Federal Deposit Insurance Application from further processing by the Federal Deposit Insurance Corporation. GM Defense announced in June that it is providing commercial battery electric technology in support of the University of Texas at Arlington Pulsed Power and Energy Laboratory and Naval Surface Warfare Center Philadelphia Division.

CRUISE SUSPENSION: In October, The California Department of Motor Vehicles issued a statement on the immediate suspension of deployment and driverless testing permits for GM's Cruise: "The California DMV notified Cruise that the department is suspending Cruise's autonomous vehicle deployment and driverless testing permits, effective immediately. The DMV has provided Cruise with the steps needed to apply to reinstate its suspended permits, which the DMV will not approve until the company has fulfilled the requirements to the department's satisfaction." Following the suspension, Cruise said, "The most important thing for us right now is to take steps to rebuild public trust...In that spirit, we have decided to proactively pause driverless operations across all of our fleets while we take time to examine our processes, systems, and tools and reflect on how we can better operate in a way that will earn public trust." In November, Cruise CEO Kyle Vogt and Daniel Kan, co-founder and chief product officer, resigned and GM laid off 24% of Cruise full-time employees in December. In January, Cruise released the Quinn Emanuel Urquhart & Sullivan report regarding the October 2, 2023 incident in San Francisco and Cruise's subsequent interactions with regulators and the media. "The Quinn Emanuel report makes important findings, conclusions, and recommendations regarding these events, which arose from an incident in which a hit-and-run driver tragically struck a pedestrian and launched her into the lane of travel of a Cruise AV, which unavoidably struck her," the company said. "The Cruise AV, determining the collision to be a side impact with the pedestrian rather than frontal, pulled forward approximately 20 feet and dragged the individual in the process. This sequence of events caused serious injury.... Understanding exactly where Cruise fell short will help both Cruise and the industry learn from the incident, strengthen protocols, and improve technology." In February, Cruise appointed Steve Kenner as chief safety officer. Along with its Q1 results, GM said it expects FY24 Cruise expense of $1.7B. In May, Cruise resumed supervised autonomous driving with safety drivers. Additionally in June, GM CFO Jacobson said the company will invest $850M in Cruise to help cover operational costs.

ANALYST VIEW: In June, BofA noted that in addition to GM's increased buyback and dividend, CFO Paul Jacobson presented at a conference and noted that GM expects Q2 earnings to be "better" than Q1, which the firm said is "directionally consistent with
our model" and "suggests there could even be upside." GM also expects 2024 EV production to be 200,000-250,000, said it continues to believe it can achieve positive variable profit this year, and separately announced plants to inject $850M in cash into Cruise, the analyst said. The firm, which believes "there is a long way in front of the company to drive more possible upside and the potential to make tough strategic decisions," maintained a Buy rating and $75 price target on GM shares.

FORD SALES: In May, Ford reported April U.S. sales down 2.4% compared to last year to 179,588 vehicles, with electric vehicle sales of 8,019, up 129.2%, hybrid vehicle sales of 17,997, up 59.5%, and internal combustion vehicle sales of 153,572, down 9.2% from the same month of last year. In June, Ford reported May U.S. EV sales of 8,966, up 64.7% year-over-year, Hybrid Vehicle sales of 17,631, up 64.5%, and Internal Combustion sales of 163,417, up 5.6%, for total vehicle sales of 190,014 units, up 11.2% compared to the same month of last year. In July, Ford reported Q2 U.S. sales were up 0.8% year-over-year to 536,050 vehicles.

FORD PARTNERSHIPS, INITIATIVES: In April, Ford announced it would retime the launch of upcoming electric vehicles at its Oakville, Ontario, assembly plant while continuing to build out an advanced industrial system to produce its next-generation electric vehicles, including greenfield construction and conversion of existing assembly plants. The company said it was continuing to invest in a broad set of EV programs as it works to build a full EV line-up. Additionally in April, Ford recalled nearly 43,000 small SUVs because of possible gasoline leaks as well as over 456,000 Bronco Sport and Maverick vehicles due to a battery detection issue. In May, Ford announced senior leadership moves with CFO John Lawler becoming vice chair and Sherry House, who most recently was CFO at Lucid Motors (LCID), joining Ford as vice president, finance, part of a plan to succeed Lawler as CFO in early 2025. Additionally in May, Ford Pro and the City of Dallas entered a ten-year EV charging infrastructure agreement.

ANALYST VIEW: In July, Barclays raised the firm's price target on Ford to $17 from $16 and kept an Overweight rating on the shares as part of a Q2 preview for the autos and mobility group. The analyst again favors car manufacturers into the Q2 prints citing steady pricing and potential guide raises. Suppliers have opportunity for outperformance given "very weak" investor sentiment, but the set-ups are mixed by program exposure, the analyst said.

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