General Motors Corp.

GM Leaders Forecast Tripling of EV Sales in ’24

Jan. 30, 2024
But CEO Mary Barra says the auto giant “will follow the customer” and flex production to ICE vehicles if needed.

The growth rate of electric-vehicle sales may have slowed—as growth rates of newer products often do—but General Motors Corp. executives are planning to roughly triple their EV sales from a year ago, thanks to new models hitting showrooms.

Speaking to analysts after Detroit-based GM reported fourth-quarter profits that beat expectations, CEO Mary Barra said her team is forecasting that it will this year make and ship between 200,000 and 300,000 EVs under its Chevrolet, GMC, Cadillac, BrightDrop brands. In 2023, the company sold a told of 75,883 EV vehicles.

In EV-hungry California, where battery-powered cars captured 21% of sales last year, GM was the No. 2 company with about 5% market share. Tesla continues to dominate that market with 60% share, but that number is down 10 percentage points from 2022 as the Chevrolet Bolt and other vehicles joined Tesla on the market.

Still, Barra and her team are hedging themselves should EVs’ growth rate slow further. Even though several forecasters expect EVs’ share of the total U.S. automotive market will grow to 10% this year from 7% in 2023, Barra said GM will start to include plug-in hybrid EVs in its North American lineup and is prepared to curtail production.

“We believe our competitive position will improve throughout the year” as new models come to market, Barra said on a conference call. “However, if demand conditions change, we’ll take advantage of our manufacturing flexibility […] to build more ICE models and fewer EVs. Ultimately, we will follow the customer.”

On plug-ins, Barra said a big reason for the move—more details of which will come soon—is that it helps GM meet stricter federal fuel economy targets as the auto sector transitions to produce more EVs. GM is selling plug-in hybrids in several of its overseas markets and was an early adopter of the technology last decade before discontinuing its Chevrolet Volt model five years ago after it regularly sold fewer than 20,000 units annually.

The forecasted higher EV sales and other production efficiencies will help GM trim its losses from making the vehicles, with lower commodity prices also chipping in, Barra and CFO Paul Jacobson told analysts. Jacobson also noted that being able to flex production between EVs and vehicles powered by internal combustion engines will help GM maintain its EV prices. Market leader Tesla Inc.—which last year produced 560,000 EVs at its California plant versus GM’s 76,000—has in the past year repeatedly lowered its prices to sustain demand.

“We feel good about the trajectory that we’re on right now,” Jacobson said of EV sales growth and the forecast reduction in losses from making them.

In the fourth quarter, GM produced a net profit of $2.1 billion on sales of nearly $43 billion; those numbers were up slightly and down slightly, respectively, from the same period in 2022 and were hurt by the United Auto Workers’ strike that was resolved in November. For the year, the company booked net income of $10.1 billion on $172 billion in sales. Looking to this year, Barra and Jacobson are projecting profits to be in a range of $9.8 billion to $11.2 billion, which is well above what analysts had been expecting—and despite Jacobson saying overall auto prices could slip around 2% for the year.

“So much for [Tesla] price cuts putting GM out of business,” well-known investor Gary Black said on social media platform X. “All this talk about [Tesla] price cuts destroying legacy auto profitability is dumb.”

Many investors seemed to agree with Black’s assessment. Shares of GM (Ticker: GM) were changing hands around $37.90 in late-morning trading Jan. 30, up 7% from their previous close. That moves has taken them back to their level of six months ago and grown the company’s market capitalization to nearly $52 billion.

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