Earlier this summer, GM introduced the next iteration of its popular Silverado 1500 and Sierra 1500 full-size pickup trucks to much fanfare.
It’s been seven years since the pickups’ last redesign, yet GM has kept the winning formula going for good reason. General Motors has been the full-size pickup market share leader since it overtook rival Ford in 2020, one year after its last 1500 redesign.
Although the announcement came in June, fans had to wait until September for the first looks and reviews to come in. Reviewers such as Edmunds weren’t disappointed, saying “our early returns on the Silverado’s updates are positive.”
For investors, GM is not just getting an attractive new update to its most popular vehicle. Analysts at Bank of America say that the company’s stock will benefit from the redesign, but that bump won’t happen for some time.
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Silverado/Sierra’s “measured redesign” protects market share
Bank of America is a fan of the timing of GM’s redesign for the Silverado 1500 and Sierra 1500 for Model Year 2027.
“We view this as a deliberate strategy to protect the full-size pickup share leadership GM has held since 2020,” analyst Alexander Perry wrote in a note viewed by TheStreet. “We think it also suits a brand-loyal customer base, where the risk of alienating existing owners looking to upgrade likely outweighs the reward of a more radical change.”
Perry sees the external changes as “modest,” so fans who love the brand already will be able to recognize the vehicle despite the changes. But he pointed out that the big changes are inside the vehicle: a larger center screen, a 5.7 L (402 hp) V8 that replaces the old 5.3 L (355 hp) V8, and a 6.6 L (481 hp) version that replaces the old 6.2 L (420 hp) V8.
While incremental changes make sense, Perry also noted that the Dodge Ram’s 1994 overhaul drove the largest market-share gain of any full-size pickup redesign BofA has reviewed, jumping more than 700 bps.
However, Dodge’s pickups at the time weren’t as popular as GM’s are now, which is why the incremental redesign was a better option, according to Perry.
GM’s stock will benefit from redesign, eventually
GM will see some price/mix tailwinds in 2027 as it prioritizes higher-margin trims from the light-duty redesign at first. But as volume sales in 2028 and production ramp, its stock will start to really see the benefits from the moves it is making this year.
GM has already said it expects flat year-over-year volumes in 2027, but year two after the redesign will be different based on historical trends.
“In 2019, GM lost ~90bps of full-size pickup share, which was partly due to the UAW strike (which reduced GM’s total deliveries by ~280K units). However, GM saw strong price realization on its new trucks, adding ~$1.3B to 2019 EBIT before higher material costs, and it regained ~390bps of share in 2020. In its prior two redesigns (2007 and 2014), GM gained share in both year 1 and year 2,” Perry said.
GM’s new trim structure should also help support a richer mix, as the company has cut its middle trims — LTZ and RST at Chevy, and SLE and SLT at GMC — while it maintains its luxury and off-road options out front.
MSRPs for the 2027 Silverado are up 4.6% year over year, while the Sierra is 2.9% more expensive.
“We expect GM to launch crew cabs first (similar to 2019), with smaller cabs to follow, further enriching early mix benefits (Sierra Pro 4×4 crew cab at $51,295 vs. $42,095 for the base 2WD regular cab),” Perry said.
Are the new Silverados and Sierras any good?
Despite their popularity, the Chevy Silverado 1500 and Sierra 1500 were well overdue for an overhaul, said reviewers at Edmunds.
“There were several areas where we were looking for specific improvements over the last truck, including backseat comfort, cabin materials, and more features to better compete with the best that Ford and Ram have to offer,” Brian Wong noted in his review.
He called the styling changes on the exterior “fairly subtle” while noting that the “overall look of the Silverado hasn’t changed much.”
But the interior is where the real changes occurred, as Chevy “copied Ford’s and Ram’s homework” to improve the vehicle’s deficiencies.
The new Chevy Silverado will start at $41,395 for the base WT (Work Truck) model, while popular trims like the Z71 are priced at $50,695 and the off-road Trail Boss starts at $63,995. The ZR2, the most expensive trim, starts at about $80,000.
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