Numbers and statistics tend to be fairly useless without context. For example, on paper, General Motors had a fantastic 2023 on the electric vehicle front; it sold more EVs last year than it ever has. Unfortunately for GM, the vast majority of those EVs were the dated and now-discontinued Chevrolet Bolt, while it struggles with quality issues and launches for its more modern electric efforts.
Consider 2024 to be a kind of "do-over" year for GM's EVs, then. And more importantly, one where it still aims to be profitable from selling them.
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Can GM Be A Player In The Electric Future, Or Not?
GM announced relatively early on that it plans to go all-electric by 2035. Things haven't gone well since then, with its new Ultium EV platform plagued with bugs and delays. Now it faces a year with more competition and more uneven demand too.
GM detailed more of its EV plans for this year on this morning's Q4 2023 earnings call. And right now, GM is doing just fine; the automaker reported net income of $10.1 billion, beating the estimated $9.1 billion from earlier guidance. Total revenue was $172 billion, a sizable increase from 2022's total revenue of $157 billion—all that, despite high costs from the United Auto Workers strike. It also expects another profitable year in 2024, posting a guidance of $9.8 billion to $11.2 billion in net revenue.
But "right now" isn't the problem for GM. It's tomorrow and beyond.
On that front, GM is coming off a notoriously rough year. It suffered through delayed launches of multiple EVs, a stop-sale order on the highly anticipated Chevrolet Blazer EV (which followed a road-trip charging debacle experienced by InsideEVs), a stock price that has remained largely flat for the past decade, and a series of disasters at the Cruise robotaxi division that led to the departure of that unit's founder and CEO.
Meanwhile, on today's earnings call and in a letter to shareholders, GM warned that "the pace of EV growth has slowed, which has created some uncertainty." That's an accurate way to phrase things; contrary to what you may see on some headlines, EVs are still selling, just not quite at the rapid-fire pace that industry officials and analysts expected. But GM's specific problem will be getting more of those EVs onto dealer lots and into customer hands without high-profile problems, such as those also experienced by Consumer Reports and Edmunds. The automaker has consistently struggled with next-generation software issues in particular, as they relate to infotainment systems, charging, navigation systems and more.
And despite walking away from a once-aggressive target of 400,000 EVs sold by the middle of this year, GM says it's not backing off entirely. "But many third-party forecasts have U.S. EV deliveries rising from about 7% of the industry in 2023 to at least 10% in 2024, which would mean another year of record EV sales," the shareholder letter says. As a result, it says it's due to launch an array of EVs this year, including several that were delayed in 2023.
"We believe our competitive position will improve throughout the year, based on higher production of the Cadillac Lyriq, GMC Hummer EV, Chevrolet Blazer EV and Silverado EV Work Truck," the letter says. "We’re also excited to have the Chevrolet Equinox EV and Silverado EV RST, the GMC Sierra EV Denali and the Cadillac Escalade IQ arriving in showrooms over the course of the year." Last year, EVs totaled about 3% of GM's overall sales, trailing behind rivals like Ford, Hyundai and the combined Volkswagen Group brands.
And the goal is to have them make money—something the original Bolt EV, as beloved as it was, could not do due to its aging platform and battery setup.
"In our EV business, we expect our U.S. portfolio will become variable profit positive in the second half of the year based on our current expectations for EV demand and production growth, strong interest in our vehicles, lower commodity prices and other factors," the letter said.
In the meantime, GM can bank on profits from the thing it's arguably still best at: gas-powered trucks and SUVs. This year, it plans to launch new or updated versions of the GMC Acadia, Chevrolet Equinox, Chevrolet Tahoe and Suburban, Buick Enclave and more. Those should keep paying the bills for now.
But the story to pay attention to at GM this year is what's beyond the gas-powered trucks, if anything. (Adding to its troubles is the fact that the automaker sees its once-lucrative China business as "roughly flat" compared to 2023, as CNBC reported today.) Meanwhile, besides getting EV launches right, it also faces a number of state and federal investigations into Cruise, which halted operations after a mishap left a pedestrian pinned underneath an autonomous car. “At Cruise, we are committed to earning back the trust of regulators and the public through our commitments and our actions,” CEO Mary Barra said in the shareholder letter.
This year is likely to be a challenging one for every automaker in the electric game, as they seek to ramp up output, bring costs down and match their sales to customer demand—especially those customers beyond the first- and second-wave adopter crowd.
But given the Ultium platform's many troubles last year, 2024 will be a test of whether GM is really going to be a player in the zero-emission space at all.
