- During General Motors’ earnings report, CEO Mary Barra said that production improvements have made it possible for the cost of making a Cadillac Lyriq EV to drop by more than $12,000.
- Even though there were problems with production in 2023, GM said it would keep making between 200,000 and 300,000 EVs in North America until 2024. All of these cars would have Ultium battery packs.
- GM says that the GMC Sierra Denali EV, the Cadillac Escalade iQ, Celestiq, and Optiq are some of the new cars that will make more EVs this year. While that waits, GM is taking outside funds for the controversial Cruise Robotaxi service.
General Motors CEO Mary Barra and CFO Paul Jacobson told Wall Street investors on Tuesday about the company’s first-quarter earnings report. They said that the company’s production of battery modules has increased by 300% in the last six months, which has caused the cost of building a Cadillac Lyriq to drop by $12,000.
GM said it will stick to its goal of making between 200,000 and 300,000 EVs in North America by 2024. This is because its Ultium EVs are on track to make a “positive variable profit” in North America later this year.
This could mean more trouble for Tesla, which has been in second place in the world for making electric vehicles since the end of last year, behind only BYD of China. Bloomberg News reports that Tesla has recently announced that it will be cutting jobs by 10%, which means that 14,000 people will lose their jobs.
GM needed help growing its electric vehicle (EV) business last year with a lot of new models. They only sold 75,883 EVs, and 62,045 of those were expensive Chevrolet Bolts without the UltraLtium battery module. When the third-generation Ultium model comes out in late 2025, the Bolt will no longer be made.
However, the market will decide how many EVs GM makes, not the other way around. Bara said, “We’re always going to be responsive to consumer demand,” pointing out new and upcoming products.
GM said that the number of Ultium EVs delivered in Q1 was 36% higher than in the fourth quarter of 2023. Jacobson says that the Cadillac Lyriq is “outselling EV nameplates from European luxury brands,” such as Mercedes-Benz, BMW, Porsche, and Audi.
Some of the electric cars that are going to be made will be the Chevy Equinox EV, which has a range of 319 miles, and the Silverado EV RST, which GM calls “the most affordable 300-mile range EV.” Both are due in the middle of the year.
GM has also announced the release of three new EV models this year: the GMC Sierra Denali EV and the Cadillac Escalade iQ, Celestiq, and Optiq. The Optiq will make its debut at the Beijing Motor Show later this month.
Another new technology is GM’s Cruise Robotaxi service, which is starting to improve again after a terrible second half of 2023 in San Francisco. Barra and her coworkers will have no trouble finding another company to invest in the division.
In the first quarter of 2023, GM spent $400 million on the Cruise robotaxi unit, up from $800 million in the same quarter the previous year. Barra said that the company plans to spend $1.7 billion this year on Cruise. Since it doesn’t make money from taxi fees, “expenses” is another word for “loss.” As of now, Cruise is backtesting with real drivers in Phoenix. It aims to start with supervised and unsupervised driving in some areas before moving on to other areas.
The things we put on hold have been getting done, and we’re making progress. So, by continuing to make sure we understand the problems with a lower chance of happening but a higher seriousness, we have greatly improved the safety of the system, the speaker said. According to her, “We’re looking at a lot of options right now” for growing Cruise’s robotaxi business, such as “taking outside investments.”
Strong sales of GM’s full-size SUVs and pickup trucks with internal combustion engines in the first quarter helped the company quickly recover all of its costs for developing Ultium and Cruise.
The car company will continue to make more of its most profitable but least fuel-efficient cars until 2024. These include the Cadillac Escalade, the GMC Yukon and Yukon XL, and the Chevrolet Tahoe and Suburban.
General Motors increased its full-size SUV market share by three points in the first quarter to 66%. It also said that its market share of full-size trucks went up by more than three points “with incentives below competitors.” Pickup offers won’t go up much as GM starts to retool for the brand-new 2026 Chevy Silverado and GMC Sierra.
Jacobson and Barra said that the company’s good financial success was due to the “high mix” of full-size truck and SUV sales, which included sales of high-end trim levels with lots of extra features and not many incentives.
Sales of the new Chevrolet Trax crossover rose 481% in the quarter compared to the first quarter of 2023, helping to balance out the high-profit mix. Before income taxes were taken out, the car company made $3.9 billion in the first quarter from $43 billion in gross sales.
Wall Street has been demanding that GM buy back enough common stock to bring the total number of existing shares below $1 billion since the company emerged from bankruptcy more than 14 years ago. Bara said that GM is on track to reach this goal. At the end of the first quarter, GM had 1.16 billion shares.
General Motors (GM) has raised its financial forecast for the year by $500 million because of its good performance in the first quarter. This means that it now expects its annual EBIT to be between $12.5 billion and $14.5 billion. Wall Street reacted immediately on Tuesday. At 2:45 p.m. today, GM’s stock price had risen 5% to more than $45 per share.
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