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GM's third-quarter US unit deliveries fell 5.5% year over year on an equal number of selling days. Lower electric vehicle demand and discontinued models held back volumes, while high end mix such as Cadillac's V-Series did well and light-duty pickups excluding EV models rose 9%.

Why it matters: GM's highest volume vehicles, Silverado, Sierra, Equinox, Traverse, and Trax, were in line from a year ago mostly due to the combustion Silverado light duty up 13.3% and the affordable Trax crossover up 16.3%, so the overall demand picture does not look poor year over year. Mix looks mostly positive for third-quarter earnings due on Oct. 20. The Buick brand rose 7.9% with the Enclave Avenir (highest-end trim) posting a record third quarter. Cadillac is on pace for a record year for its V-Series racing trim. However, heavy duty pickup mix fell by 340 basis points to 31.3%. We like that GM was able to sell vehicles while keeping incentives below industry average, which has been the case for over three years, per the company. The lack of discounting helps pricing as does GM's mix favoring light-truck models and premium brands such as GMC and Cadillac.

The bottom line: We maintain our $86 fair value estimate for no-moat GM. We will wait for third-quarter earnings to see if management's optimism on the future wanes. Late 2026 brings the new generation Silverado and Sierra, so we don't expect fading optimism on the earnings call. GM's numbers underperformed the industry due to EVs and no significant volume hybrid offerings. US industry third-quarter volumes per Omdia fell by 1.4%. For September, US industry sales increased 4.2% but only rose 0.1% after adjusting for one extra selling day in September 2026. September's seasonally adjusted annualized selling rate was 15.98 million, down from 16.57 million in September 2025. We expect full-year 2026 sales to be in the high 15 million to low 16 million range as some consumers are looking for hybrids to combat high gas prices.

We are raising our fair value estimate to $86 per share from $83. The change is from the time value of money adjustment in our model and higher 2026 results after GM raised guidance on July 21. Our midcycle total company (including GM Financial) operating margin remains 6%.

We model equity income over our five-year forecast of about $1 billion. We will go back to modeling equity income losses each year if China’s turnaround fails to materialize, which would likely reduce our fair value estimate by at least $4-$5 per share. We remain pessimistic about GM China’s prospects for significant success, given intense competition from other Chinese automakers, so we model declines in annual equity income over our five-year forecast period.

We will continue to review our midcycle margin assumption as the company progresses through its transformative strategy announced in October 2021 and confirmed in November 2022 of targeting total company (including GM Financial) 12%-14% EBIT margin by 2030 and revenue potentially now over $250 billion after factoring in Cruise no longer in robotaxis, as announced in December 2024 (original revenue range was $275 billion-$315 billion). In recent years, however, management has indicated that the 2030 targets are aspirational or best-case scenarios. New asset-light businesses centered on data analytics and subscriptions for performance upgrades and autonomous features such as Super Cruise should enable margin expansion over time. Our weighted average cost of capital is about 10%. Our estimate for GM's midcycle automotive adjusted EBIT margin, including equity income (mostly Chinese joint ventures), is around 5% to reflect a midcycle margin encompassing the wide range of possibilities for both good and bad times.

Our compound annual revenue growth rate, excluding GM Financial, remains about 4%. We model about 80 basis points of declining North American market share from 2025 levels through 2030 because of continued strong competitive threats. This forecast may prove too punitive if GM's products remain desirable, as they were in 2025 when GM's US share increased 60 basis points. GMNA's 2025 share of 16.3% is higher than our midcycle assumption. We still model the critical midcycle automotive operating margin, excluding equity income, in the last year of our explicit forecast period at just below 5%. GM’s transformation plan was announced in late 2018, and its 2021 pivot into selling data analytics and connected services should yield billions in new free cash flow if successful. Capital expenditure is modeled at about 6% of non-financial-services revenue annually for most years of our forecast period. We model capital expenditure at about $11 billion in 2026, $12 billion in 2027 and 2028, $11 billion in 2029, and $10 billion in 2030.

GM began reestablishing its captive finance arm with the creation of GM Financial in 2010 via the acquisition of AmeriCredit. We add GM Financial to the valuation at its year-end 2025 book value of $15.8 billion, which is $19 of our fair value estimate. Our diluted share count is about 868 million, reflecting continued generous share repurchases in 2026.

GM does not have an economic moat, and we do not expect that to change. Vehicle manufacturing is a very capital-intensive business, but barriers to entry are not as high as in the past. The industry is already full of strong competition, so it is nearly impossible for one firm to gain a durable advantage. Automakers from China, which have a cost advantage over American firms, may soon enter developed markets such as the US, and South Korea's Hyundai and Kia have become formidable competitors. Many battery electric startups are emerging in addition to Tesla, such as Lucid, Rivian, and formidable Chinese EV makers. It likely is just a matter of time before Chinese automakers open US or Mexican plants to sell vehicles in GM's home market of the US. Unlike when Toyota and Hyundai-Kia first entered the US, we expect Chinese models to immediately appeal to many American consumers due to their exterior design and software-defined vehicle capability. Furthermore, the auto industry is so cyclical that in bad times even the best automakers cannot avoid large declines in return on invested capital and profit. Cost-cutting helps ease the pain, but it does not restore all lost profit in bad times. Tariffs are also making management's job harder than it needs to be.

GMNA's breakeven point of about 10 million-11 million units is drastically lower than it was under old GM.

Management is not afraid to buy back large amounts of stock, as shown by two accelerated share-repurchase programs across 2023-25 and a $6 billion authorization announced in January 2026.

GM can charge thousands of dollars more per vehicle in light-truck segments. Higher prices with fewer incentive dollars allow GM to get more margin per vehicle, which helps mitigate a severe decline in light-vehicle sales and falling market share.

GM may have to see a US recession to prove it can do much better than old GM before the market will award the stock a higher P/E multiple. The recession came in 2020, and may again in 2026 or 2027, but the P/E multiple well after the downturn is uncertain.

Auto stocks often sell off severely because of macroeconomic concerns, even if the bottom-up story looks attractive.

The US auto market is becoming more crowded each year. Hyundai-Kia, Tesla, and other firms such as new entrants from China and EV startups may take more share over time from existing players like GM.