General Motors reported higher profits Tuesday behind another round of strong North American auto sales, with executives vowing a flexible approach to electric vehicle (EV) investment while demand growth ebbs.
The major US automaker's second-quarter results demonstrated a continued lift from robust pricing in its home market, thanks to healthy demand for trucks that has made up for weakness in China.
GM, like fellow Michigan automaker Ford, has slowed down its EV build-out, pushing back another project even as company officials emphasized a long-term commitment to the strategy.
"As we go forward, we're going to bring additional capacity online in a measured cadence," said Chief Executive Mary Barra, pointing to third-party studies showing slower EV growth in the coming period compared with the last few years.
Profits came in at $2.9 billion, up 14 percent from the year-ago period while revenues rose seven percent to $48 billion.
GM increased some of its full-year projections based on the results.
North American auto sales rose compared with the year-ago period, with the company enjoying still-strong vehicle pricing that has lasted longer than analysts expected.
Barra, in a letter to shareholders, pointed to "consistently high performing portfolio of ICE (internal combustion engine) trucks and SUVs on a volume, share and margin basis."
GM continued, however, to struggle in China, where competition among car companies is high and the company suffered a second consecutive quarterly loss in equity income.
Competitors are "prioritizing production over profitability," said Barra, who plans to revamp a joint venture with Chinese company SAIC in hopes of a turnaround.
"When you get into the type of pricing where that's going on now, it's really a race to the bottom," Barra said.
GM noted that the company's Cruise autonomous vehicles service has returned to the road in three cities -- Phoenix, Dallas and Houston -- after a pause due to safety issues.
Cruise is employing a driverless taxi model in these three cities, with a safety driver present to take over if needed.
The company has not resumed service in California. Authorities halted testing of Cruise vehicles in the state in October 2023 following a series of accidents.
GM accounted for $605 million in costs in the second quarter due to a production halt on the Cruise Origin, which had been planned as a fully autonomous vehicle with no steering wheel.
Barra said the company was focusing on scaling up Cruise with a model based on the Chevrolet Bolt.
"I do think in the future, there's going to be opportunity for a vehicle like the Origin and so that remains open to us at the right time," she said.
"This was about getting costs down at Cruise and being able to scale without... uncertainty" around regulatory action.
In a letter to shareholders, Barra said the company was proceeding with a ramp-up of production of the Chevrolet Equinox EV, calling the vehicle a "game changer" because of its moderate price.
But GM Tuesday announced it is pushing back for the second time the schedule to revamp a plant in Orion, Michigan, to produce EVs.
GM now expects production to begin in 2026, a six-month delay from the prior schedule after previously pushing back the $4 billion plant upgrade by a year.
"We are adjusting our spending plans to make sure we're capital efficient and moving in lockstep with customers," Barra said.
GM shares were down 6.2 percent in morning trading. Shares had risen nearly 39 percent between the end of 2023 and Monday.
