We wanted to flag a few highlights in today's Wolfe Research Auto Daily....
The Setup for GM Looks Good to Us
We expect GM to maintain their full year 2019 guidance when they report 2Q earnings (EPS $6.50-$7.00; FCF $4.5-$6.0 bn). This implies a significant acceleration in 2H (2H EPS could annualize at $8.00+ and FCF ex working capital could annualize >$8 bn). We believe that this should help build conviction in 2020 (likely above consensus). So what are the biggest risks? Aside from Macro, we’re watching UAW negotiations that kick off next month.
Driving EV adoption higher in Europe and US probably easier said than done
OEM’s hope to get to ~8% adoption of EV / PHEV in Europe in 2020 / 2021. But saying this and doing it are very different things. Recent newsflow indicates OEM’s are still in early stages of launching dedicated EV platforms, securing battery supply, and building charging networks.