GM minimises losses from electric cars

GM refers to this key figure as “variable profit positive.” It does not include costs such as assembly line construction, but shows financial progress with electric cars. GM had previously forecast that EV operating losses would fall by $2bn to $4bn in 2025 from an undisclosed level and now expects that the decline in losses would likely be closer to $2bn. The calculation is based on an overall target of 300,000 electric cars sold in 2025.

In 2024, GM did not reach its target of producing and selling 200,000 EVs in North America but ended up with 189,000 units, according to CFO Paul Jacobson. However, there was a very positive development over the course of the year: GM was able to increase from 16,400 electric cars in the first quarter to 44,000 units in Q4 – in the US. The US market share also increased from 6.5 per cent to 12.5 per cent.

In the fourth quarter, the company increased turnover to 47.7 billion US dollars, exceeding analysts’ expectations. Pre-tax profits totalled USD 2.5 billion. However, because of the 4 billion dollars in restructuring charges in China, the bottom line was a net loss of USD 3 billion.

Unlike Ford, General Motors does not report the figures for the electric car business separately. There is only Jacobson’s statement that sales of electric cars have exceeded fixed costs. And the inventory of electric vehicles fell significantly in the fourth quarter: at the end of September, GM still had 100 days’ worth of electric cars in stock, compared to 70 days at the end of the year.

Despite the pre-tax profit and an overall better outlook for the current year, GM shares fell by nine per cent following the publication of the financial figures. According to Reuters, this was due to US President Donald Trump’s tariff threats and reduced support for electric vehicles. Trump is threatening to impose tariffs on raw materials needed to build electric cars and imports from Canada and Mexico. GM builds electric vehicles for the North American market in both countries. In any case, GM is already preparing for a customs scenario and bringing as many vehicles as possible from its stock in Mexico and Canada to the USA. “Every delivery that we can make before a tariff is instituted, it’s that much better, rather than sitting on inventory,” CFO Jacobson is quoted as saying.

In view of this starting position, analysts have described GM’s forecast of a net profit of between 11.2 and 11.5 billion dollars in 2025 as “optimistic.” However, analysts’ expectations are only slightly lower at 10.8 billion dollars.

reuters.com, gm.com (PDF)