GM reclaims American car sales crown but CFO warns brand needs to 'pace ourselves' on switch to EVs | 9Q99B68 | 2024-04-25 12:08:01
GENERAL Motors has retained the American car sales crown in the first quarter of the year and is looking to stave off electrification headwinds in its fleet.
GM maintained earnings momentum in the first part of 2024 after recording the most American car sales – and the company said the robust profits allow it to look forward into the brand's future.
During the first-quarter earnings call, GM's CFO, Paul Jacobson, said the company's buyers have "been remarkably resilient."
American car companies have fretted that high interest rates will reduce profits as consumers move away from making high-dollar purchases.
But the company reported an operating profit of $3.7 billion in the quarter.
The company previously predicted $3.12 billion in profits.
Mary Barra, the company's CEO, said the brand will use the profits to "strengthen our ICE portfolio, scale EVs, and reinvest in the business."
GM did face some headwinds in its EV sales as the company made a seismic electrification shift.
Total EV sales slid in the US by over 20% compared to the same quarter last year.
The company has released several vehicles with its new Ultium battery propulsion system.
The platform pairs giant cells of stacked battery packs and gearboxes onto the underbelly of the brand's EVs.
GM reported a 36% increase in Ultium battery vehicle sales this quarter.
<!-- End of Brightcove Player --> The GMC Hummer and the Cadillac LYRIQ were two of the company's best-selling EVs in the quarter.
But the company, which recently discontinued its best-selling Bolt EV, saw a dramatic drop in EV sales with its outgoing battery fleet.
Barra said the company still believes it will go all-electric by 2035 and expressed confidence that GM's EV business will be profitable by the end of the year.
Jacobson said the shift is in line with GM's aim to "pace ourselves with the [EV] customer."
However, the company will launch several new electric vehicles in the coming months.
<p class="article__content--intro"> Pros and cons of EVs vs gasoline-powered vehicles </p> </div> </div> Chevy's Equinox EV will hit the market with a starting price of around $35,000.
GM said it is the cheapest EV with a 300-mile range in the US market.
The Silverado EV Work Truck is also expected to hit showrooms this year.
The pickup will boast an estimated 450 miles of electric range, 10,000 pounds of towing capacity, and a starting price of around $80,000.
PRICE UPDATE
Potential EV buyers have scoffed at the market's exceptionally high prices.
But executives on the earnings call struck a hopeful tone when talking about price expectations.
Jacobson said car prices in the brand remained flat across the past quarter.
Looking forward, the brand sees several ways to cut costs.
GM confirmed it had not locked itself into high lithium prices after the costs for the rare metals spiked during historic demand increases.
The company said lower-cost lithium paired with the expected lower interest rates in the back half of 2024 will boost EV sales.
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